Bitcoin (BTC) price is sliding, testing the low $26,000 area of support after weeks of painful, sideways consolidation.
Although while the horizontal support line is clearly important, it’s nowhere near as critical as another line that BTCUSD definitely must hold to remain bullish.
Drawing Tendency Lines In Bitcoin (BTC) Technical Analysis
In the practice of technical analysis, drawing tendency lines is among the 1st basic steps anyone will take. Simply connect the line across numerous points on the chart to highlight support and resistancesupport and resistance.
Another basic step involves turning on technical indicators to look for potential buy and sell indicates. Several of these tools call out when an investment is overbought or oversold, such as the Relative Strength Index.
More advanced techniques include drawing tendency lines on indicators like the RSI instead of price. Much like drawing these lines from point to point diagonally can plot uptrends or downtrends, horizontal lines can likewise act as support or resistance on the RSI.
On the weekly timeframe Bitcoin (BTC) price has pulled back to a reading of 53 on the RSI. This level must hold, reports by past price history. Every time it has, the cryptocurrency market has erupted higher.
Bulls Must Show “Strength” At Current Levels
The over BTCUSD weekly chart shows the RSI pulling back to a reading of 53. The last time this happened, was in Q3 2020 right before an epic bull run. The short positive tendency rally in 2019 blasted right through it without a retest of the level.
Prior to these instances, all other outcomes were shockingly positive tendency when Bitcoin (BTC) held over the line. Rather than sliding into a bearish phase, every time BTCUSD weekly RSI held at the line in 2016 and 2017, the cryptocurrency market simply marched higher.
Other times, when BTCUSD failed to hold this line, a bear market ensued. A failed effort to get back over the level typically led to the last leg of the bear market. Nonetheless, getting back over it and then failing to hold could provide the cryptocurrency market with something more reminiscent of the COVID collapse and is something to watch closely for. Hold the line, and bulls will run once more, possibly to new all-time highs.