As Bitcoin heads into the first monthly close of 2019, we take a look at the price action over the last month and what might lie ahead for the number one crypto asset.
The monthly chart paints a painful last six months for Bitcoin price 00, with six consecutive monthly red candles surpassing that of each of the previous bear market cycles.
Through January 2019, the bears have been in control with the bulls failing to make a higher high above $4,300 on the monthly chart, and $3,700 now looking like major resistance to be overcome.
One relieving factor for the bulls is that new lows were not found, with $3,300 remaining as support, although this is now under assault.
Despite the difficult picture, it is important to note that Bitcoin has still not revisited the $2,975 price, which resulted in an unforgettable 30% upside response during the 2017 bull run. Many are looking to this as a critical technical level which is yet to be interrogated.
The key monthly technical levels below this are $1,800 and $1,400, but $2450 and $2,800 are also areas of interest.
By definition, as Bitcoin price retreats back through its parabolic advance, additional levels of support will be identified and will become more difficult to breakthrough for a sustained period of time.
The daily chart paints a more relieving picture for the bulls in the short term, with Bitcoin’s current decline showing signs of conclusion within a quasi-falling wedge advancing towards the 200-week moving average price around $3,300.
This would imply that a short term recovery towards $3700 may be possible, but there remains the issue of the declining diagonal resistance overhead.
As previously reported, the bulls are still leveraged over and above that of the Bears at a ratio of 1.13:1.
Although speculative selling pressure is starting to creep at these prices, history would suggest that more is to come and the low $3000s will need to be revisited once more with conviction before a definitive bottom can be found.
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