Bitcoin price finished the week trading at $3415, down 3.2% on the week from $3530, with very little signs of trading higher. With the 2018 lows beckoning, we take a closer look at the price action.
The weekly chart for Bitcoin illustrates that Bitcoin [price 00 is now being capped by $3500 and is drifting towards the $3100 range, which evoked a buying response pushing the asset up 30% towards the end of December.
The MAC-D indicator illustrates that although Bitcoin’s price is still in a downward trajectory, the momentum of the move is declining. This is not necessarily a bullish underlying indicator but it suggests that the bears are losing selling interest as we approach levels of notable support.
The Key levels to watch for the week will be Bitcoin trading above the prior week opening $3500 and what occurs if Bitcoin is pushed towards the low $3,000s.
As reported last week, the institutional interest appears to come into play on breaks of key support so a failure by the bulls to defend $3,000 could see a sharp decline to the downside.
The Daily chart shows that Bitcoin is still trending within the falling wedge towards support. The so-called ‘falling wedge’ is a bullish technical pattern, which if played out would imply an upside target of $3700 would be in sight, although this would mean overcoming the heavy resistance at $3500.
In order to invoke such a powerful move to the upside, it would likely mean that there needs to be a hard test of $3250 and below, which would be met with significant buying interest.
The Chaikin Money Flow (CMF), which shows buying and selling pressure by combining price and volume, was trending above zero last week, has been another also a sign of underlying buying pressure, despite the overall price decline.
There are five days at most remaining before the falling wedge pattern will ultimately draw to a conclusion so we are expecting a volatile week.
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