Last Week’s Bitcoin Price Movement
The Bitcoin (BTC) price recently broke its streak of eight consecutive bullish candlesticks, resulting in a decrease below a crucial resistance area. Now the question is whether BTC will be able to reclaim this level.
Bitcoin Fails to Close Above Resistance
Analysis of the weekly time frame shows that the Bitcoin price has been on a rapid upward trajectory since October. Last week, it even reached a new yearly high of $44,730. During this period, BTC created eight bullish weekly candlesticks, pushing it above a significant horizontal and Fib resistance area.
However, the BTC price fell last week, forming the first bearish weekly candlestick since the start of the upward movement. As a result, Bitcoin dropped below its major resistance level, indicating that the previous breakout was merely a deviation.
RSI Indicates Overbought Territory
The Relative Strength Index (RSI) is a momentum indicator used by traders to determine whether an asset is overbought or oversold. When the RSI reading is above 50 and trending upward, it suggests an advantage for bulls. Conversely, if the reading falls below 50, it indicates a disadvantage for bulls. Currently, the RSI for Bitcoin is still above 50 and in overbought territory. Although it has slightly decreased, it has not crossed below 70, which would be considered bearish.
What Are the Analysts Saying?
Several cryptocurrency traders and analysts have expressed bearish sentiments regarding the short-term BTC trend. IncomeSharks pointed out a CME gap at $40,000 that they believe will be filled. Similarly, Rager believes that Bitcoin will retest its moving average due to an overextended rally. CredibleCrypto is also bearish in the short-term but anticipates another high before a significant correction.
BTC Price Prediction: Has the Correction Started?
Technical analysts utilize the Elliott Wave theory to identify long-term price patterns and investor psychology, which helps them determine the trend’s direction. Based on this theory, BTC is likely in wave four of a five-wave upward movement. The daily RSI has shown bearish divergence, indicating the end of wave three. The first target for wave four’s bottom is the 0.382 Fib retracement support level at $37,650. However, if Bitcoin surpasses its yearly high, it could signal the completion of the correction and potentially lead to a 23% increase towards the next long-term resistance at $50,500.
Hot Take: Bitcoin Faces Resistance After Bearish Candlestick
Last week, Bitcoin’s price experienced a setback as it failed to close above a key resistance level. This decline broke its streak of bullish candlesticks and raised questions about whether BTC can reclaim its previous position. Technical analysts are divided on their predictions, with some anticipating a further correction and others expecting another high before a significant drop. The RSI indicator suggests that Bitcoin is still in overbought territory, although it has slightly decreased. Traders will closely monitor the price action and key support levels to gauge the next move for Bitcoin.
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