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Technical Analysis Of Bitcoin

Analysis of Bitcoin's chart. Is it in an uptrend or downtrend and where is the support and resistance.

April 5 2022

November 8 2021

After some correction, it seems that Bitcoin may be ready for a new push higher.

Recently it formed an ascending triangle in the daily chart. If you look close, it also formed a cup with handle pattern.

What we can do now is to look at the handle very carefully. The handle is the consolidation area. As long as Bitcoin stays above the low of the handle, then it is likely to continue move higher and possibly make new all time highs.

I like it when a chart shows you two type of chart patterns. It somewhat gives the signal a stronger bias.

You also need to watch the uptrend line in the ascending triangle. If Bitcoin drops below it, then that could signal weaknesses and Bitcoin could have a correction.

October 21 2021

Wow...Bitcoin finally makes a new all time highs. At this point anyone who has bought Bitcoin in the past would have already been making at least some money.

The question for us now is will Bitcoin continue to go higher? Or Will it reverse and correct? 

If it goes higher, how high will it go in the future?

These kind of questions are difficult to answer and there are no certainties. But when we look at the charts, it can give us a probability of what it may do. As traders we do not live in the world of certainty. But we want to live in the world of probabilities and only take trades that are high probability.

There are a few things that are still positive for Bitcoin. First of all, it is still trading above the rising 20 MA. This is a short term gauge of Bitcoin's trend. Secondly it is still trading above its 50 day moving average and the 200 day moving average. This is a gauge of the mid term and longer term strength of Bitcoin.

Another great thing is that Bitcoin had a 20 MA/50 MA bullish cross recently and both of these moving averages are above the 200 MA. This could set up to be a bull mode condition for Bitcoin.

What you want to look at carefully right now is whether Bitcoin can stay above the green area short term support that I have highlighted. It has not gone way above the past highs to make the past highs a new strong support yet.

But we can use the small congestion made recently around $60000 as a short term support. As long as Bitcoin stays above here, then it is likely to breakout higher in the near future.

Taking a look at the weekly chart we can see that Bitcoin recently made a bullish cup with handle pattern. This is a very famous pattern and have worked quite a lot in many stocks and indexes.

A very aggressive long term target will be the height of the cup with handle projected upwards. That will be the $95000 area. Don't say it can't go there. Bitcoin has the fundamentals to do it. Lots of people are using Bitcoin as payment for their goods and services.

In the event that there is a correction, Bitcoin may find support at the handle of the cup. That will be the area of $46000 to $52000. I would advise you to look at the rising 20 MA. As long as Bitcoin stays above this MA then we should take a bullish bias on Bitcoin.

October 18 2021

Bitcoin is on the verge of making new all time highs. The resistance (red color) on the left is being absorbed and there is no reason why Bitcoin will not go higher. If we take a measured move of the move up around July to September we can get a target of around 64000. That is the purple color arrows that I have drawn.

However, recently Bitcoin had a nice run up and set up a small congestion area. I have highlighted the area in green color. That will be the new support area. That congestion actually help to absorb quite a lot of resistance or supply from the left.

Since this green area is a support area, as long as Bitcoin stays above this area, then it is likely to make new highs soon. There is also a bullish cross and this could set up a nice run up.

The chart above is the weekly chart of Bitcoin. There may be some who are worried that there will be a double top in Bitcoin. However, since there is support around the 52000 area, then it is likely that the double top will not work. 

This means that there is a higher possibility for Bitcoin to go higher rather than being hammered down by a possible double top. Bitcoin is above its weekly 20 MA, 50 MA and 200 MA. This means that it is in a nice bullish mode. I would advise you to pay attention to the weekly 20 MA.

As long as Bitcoin stays above the weekly 20 MA, then you should remain bullish on Bitcoin.

If we take a look at the weekly chart of GBTC, Grayscale Bitcoin Trust, we can see that its chart is setting up a weekly cup with handle. This is a bullish continuation pattern and GBTC just broke out of the handle. 

The handle will be a new support area and as long as GBTC stays above the top of the handle, then it is likely that Bitcoin will continue to go hgiher.

October 7 2021

Bitcoin's price has recover quite a lot since the sell off. It is now near the all time high price. In the past Bitcoin came crashing down after it made a head and shoulders top. Head and shoulders top usually gives us quite a lot of resistance because there is a lot of price congestion in that area. Many people who bought at the price around there were losing money and thus any rise to that area may quickly be met with selling.

Which is why the last time Bitcoin rose to that area, it corrected. However, Bitcoin was able to go above the most recent highs and that area will now be a new area of support. I think the last time it rose to the head and shoulders, it would have absorbed some supply. Therefore, it is possible that Bitcoin may continue to rise.

Watch the green area that I have highlighted. If Bitcoin stays above here, then it is likely it can go up without another correction.

Bitcoin is in a 60 min uptrend and for the short term the trend is up. After breaking out of the consolidation it quickly rise up to 54000. I think this short term 60 min trend is a bit tired which is why Bitcoin dropped below the 60 min 20 MA. It may perhaps drop below the 60 min 50 MA and that is something to watch.

If Bitcoin drops below the 60 min 50 MA then it is likely we might have a correction. So watch the 50 MA carefully. Ideally we want to see Bitcoin trade sideways a bit and then have consolidation breakouts in the 60 min chart. This will help to fully absorb the supply from the large head and shoulders resistance which I showed you in the earlier chart.

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