Bullish weekly candles, but bearish Stochastic RSI cross-down
A sustained price surge from Bitcoin (BTC) has so far failed to materialise. A quick $3,000 increase over the course of Sunday is battling to hold above the $112,000 horizontal resistance on Monday. Could the price head back down to $108,000 and continue its chop sideways, or do the bulls have a trick up their sleeves yet?
The 4-hour time frame is either showing an imminent rejection of the $112,000 horizontal support, or it is revealing the beginnings of the struggle to hold above this important level. Of course, it might be that it is just illustrating the start of the next corrective impulse that will eventually make a higher low, allowing this upward trend to continue. Or perhaps it will be a lower low that could spell a lot more trouble for the bulls.
If the bulls are to definitively wrest control from the bears, a higher high above $114,000 would put the $BTC price back on track to make a new all-time high.
At the bottom of the chart, the Stochastic RSI indicators are topped out, but there is still room to run on other time frames.
The daily chart reveals the death cross that is about to take place, as the 50-day SMA (blue line) crosses down below the 100-day SMA (green line). While the term “death cross” is usually reserved for a cross of the 50-day and 200-day simple moving averages, the name can still be used in this case, and it does signal a potential shift to a bearish trend.
Historically, this cross down can generally coincide with a $BTC price pullback or an extended decline. Other factors like an RSI below the 50.00 level would tend to confirm this.
The RSI indicator is just below 50.00 on the daily chart, so it will be very important to note whether the $112,000 horizontal support level does hold. This level can be clearly seen in the chart above to provide significant support. Sunday’s strong green candle pushed through the descending trendline and Monday’s candle has opened above – at least this is a very good sign so far.
The weekly chart is a mixed bag. For the bulls, the new weekly candle opened above the $112,000 horizontal level, confirming it as support. The previous weekly candle had made its way down to the $108,000 support and had then been bought up heavily, leaving a good long candle wick behind it to tell the tale. This candle, although red, also managed to close above the $112,000 support level. It might be expected that price action could now develop above this support.
On behalf of the bears, the weekly Stochastic RSI indicators crossed back down. This is no small affair, and should they continue down to the bottom this is likely to signal negative price momentum. That said, if the bulls can continue to soak up any downside price momentum by forcing the $BTC price sideways, once the indicators reach the bottom, things swing back in favour of the bulls, as the next logical move would be a cross back to the upside.
If the bullish case plays out, the bears still have the major $117,000 resistance overhead, which stopped the bulls in their tracks for the last swing high. Also, above this is the 8-year ascending trendline. Getting above such an extensive multi-year trend will be an extremely difficult feat. A fascinating bulls/bears struggle is still to play out.
Read more on cryptodaily.co.uk
