Bitcoin Price at a Major Decision Point

The ending 21 July 2019 has been a very volatile week for Bitcoin, price opened the week at $10 185, it peaked at $11 1325 and has a low of $9080. This range of approximately $2000 has seen Bitcoin consolidating in range priming itself for its next big move. Bitcoin price is at a major decision point, what can we expect in the upcoming week?

The Bull Case

When zooming out to the weekly chart time frame, if the candle closed in its current position or nearby, the bull case could be entertained, the price has held above the 10SMA (simple moving average) and has a “bull wick” showing buyers quickly bought price back up to these levels. When dropping in closer to the 3 day time frame its is clear that the 21EMA (exponential moving average) has acted as support with price rallying off it, showing buyers are defending this area and will likely look to ride price to higher levels.

Zooming in further to the 2 day time frame the lost 21EMA has quickly been regained, was the close below a hint at trapping some bearish traders? If so that would paint an intermediate bull case. It is worth noting that on the macro time frame of the monthly not much has changed and the recent price action does no damage to this time frames bullish posture. As long as price remains above weekly open at closing the bullish case can still be made.

The Bear Case

Those who are sitting in the bear camp will likely point to the weekly local top that has formed, although there has not been continuation from the formation, they will likely be defending the week close and look to push the price below $10 200, painting a bear resolution. Zooming into the 3-day chart it is clear that price has been forming lower highs and lower lows since the close of the candle on 30 June 2019, the current candle would be sealing in another lower high if it were to close at the current price level.

Staying on the 3-day time frame, the oscillators are also telling a bearish story, the RSI (relative strength index) is trading below the EMA but on the neutral side is in the neutral zone whilst the Stochastic is losing momentum but still remains in a bearish posture crossed and angle downwards.

The resistance at monthly open is strong, when looking at 12-hour and 1 day time frames, there is clear evidence that price is being defended and pushed to close below the $10 761 level, this type of price action suggest that sellers are putting pressure to close the month on a red candle and will likely continue to defend this level through to month close.

The market is always right

The bullish and bearish case for the intermediate and short term picture is very evenly matched, either side being in control at any given moment. The market is always right and being too set on one’s side of the fence can be a mistake. The levels to watch for further development in one of the directions could be made simply as a daily close above $10 761 will likely lead to tests of the $11 503 price area and a daily close below $10 184 (week open) leading to further downside around the recent swing low of $9 000.

The macro outlook will still remain bullish in either of these scenarios, with the downside presenting some good buying opportunities.

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