Bitcoin Technical Analysis: (BTC/USD) Looking To Retest A Critical Resistance For The Second Time
Bitcoin is looking likely to retest the $7,200 resistance level for the second time this week, as buyer confidence grows in the market today. This breakout will be vitally important for the #1 cryptocurrency by market cap, as it oscillates within dangerous territory near the critical $6,000 support beneath.
BTC/USD has been a shadow of its former glory in Q1 this year, declining ever since BTC futures trading debuted on the Chicago Mercantile Exchange late last year.
For 4 months the BTC market has struggled to keep its head above water after flurries of bad media press, restrictive regulation and FUD continue to suppress any sustainable positive trend movement.
At the bottom of this downtrend we saw BTC touch the critical $6,000 support, regarded by many as the ‘psychological support’, before quickly retracing to the earlier 0.5 fib level entry point, at $11,500. This base support level is BTC’s Alamo point, where any movement below could prove fatal to Bitcoin’s price.
After completing a bearish double-top pattern at the start of March, BTC has continued to slide to the 0.786 fibonacci level at $6,600. Now we are looking for any promising signs of a potential rebound in the weeks ahead.
There’s potential for a complete Elliott Wave formation, where the corrective waves follow the impulse waves. Provided Bitcoin breaks above $7,200 we could see the asset retrace back to 0.618 fib level at $9,500 by mid-April and follow the Correction Wave back to point C at 0.5 fib leve ($11,500) by mid-May.
MACD indicator is also showing a positive convergence, where trading momentum is increasing towards the central signal line.
Bitcoin (BTC) Price Prediction
At the time of writing Bitcoin is currently valued at $7,071, only 1.8% shy of the $7,200 resistance line. Volume has been thin over the past week but is showing signs of improvement over the past 24 hours as faith starts to restore in bullish traders.
This could represent the bottom for BTC as it begins to recover its losses from last year’s gold rush but we will need further confirmation before considering an entry point.