last report had only a brief impact. Even the large resistance zone up to $14,100 was broken through in only 16 days.
What is the next step? Is the new all time high coming? When is the Bitcoin correction coming?
We try to answer some of these questions in this article. Others are pure speculation. Let’s take a look at the Weekly, Daily and 4h charts from a technical perspective.
There was upward pressure on Bitcoin in the Weekly!
This section of the weekly chart shows the sell off since reaching the all time high at the end of 2017. The closing price around $3200 and the touching of the moving average 200 served as support, after which the price started a rally up to almost $14,000. There the price reached a large resistance and a correction to the closing price of around $5350 with renewed support from the moving average 200 set in. The $5350 marked a higher low against the $3200 and signalled that market participants accepted this as the new best price for Bitcoin.
This was early/mid March and since then there have been almost only green candles at the week-end closing price. This renewed rally briefly spun up again at the previously described resistance zone, but the price began to recover and the bulls pushed the price across this zone at a rapid pace. Those who followed our last article know that at around $16200-16300 (depending on the stock market) another major resistance and a possible Bitcoin correction is waiting – this is in the 0.78 Fibonacci level.
In the Daily too expensive! Time for a Bitcoin correction!
A Bitcoin correction of the price is done by two different scenarios – via the price or via time. This section of the chart shows exactly what is meant and why a correction of the Bitcoin price can occur so slowly.
First of all, the rise since mid-March and the subsequent correction can be seen. At the same time the RSI, the Relative Strength Index, is displayed, which indicates whether a market is overbought or oversold. An overbought market starts at an RSI of 70 and higher, which is not uncommon for Bitcoin, as you can see. Even values above 80 are reached here. An oversold market starts at an RSI value of 30 and below. This was last achieved with the Corona-Low. If the price enters these zones, these are signs of a possible correction phase in the near future.
After the initial rise, the price and RSI settle down over time, creating room for the bulls to drive the price higher. The second correction on the Bitcoin chart took place over the price, which was sealed by the sharp fall from just under $12,000 to just over $9,800. In both corrections the Moving Average 200 was able to maintain its position as sufficient support, so that the price did not fall any lower.
Well, since the last correction of the price at the beginning of September, there have been no significant setbacks to give the bulls and the RSI a breather. The RSI has been back above 70 for quite some time and is currently even above 80. This is a warning signal for every trader not to look for new long entries in the long run. Let’s not forget the 0.78 Fibonacci level directly above the price.
The 4h chart as a possible correction signpost!
We also see corrections to the price on the 4h chart after an overbought RSI. One of these zones has been highlighted in the image. This is an important indicator of whether the bulls are serious about this correction. In addition, the support zone on the 4 hour chart also falls into the important zone on the weekly chart, which was a resistance a few days ago and has now become support.
Whichever way you look at it, the bulls have delivered in the last few weeks and could use a little break. A Bitcoin correction would be just what the bulls need!