The Bitcoin price is moving sideways with weak momentum in a descending triangle pattern over the last eight months with a strong support obstacle being the 5780 barrier.
BTC/USD found significant resistances on the 20- and 40-simple moving averages (SMAs) in the daily timeframe, over the last couple of weeks and has failed to create a rally above them.
In the short-term, the RSI indicator is moving slightly below the neutral threshold of 50 with weak movement, while the MACD oscillator is flattening around its trigger and zero lines, indicating that the pattern may stay in place for the next few sessions.
In case of a bearish move the price could challenge the 6020 support level before stretching south towards the 5780 barrier. A successful penetration of this hurdle would turn investors’ attention towards the 4890 support level, identified by the high of September 2014. A step lower could enhance the bearish sentiment, sending the price probably towards 2974, identified by the low of September 2017.
An alternative scenario is a surpass of the 20- and 40-SMAs which are acting as significant resistances at 6410 and 6470 respectively at the time of writing. If the bulls take the reins, the Bitcoin price could rise until the 6760 resistance level, penetrating the descending trend line to the upside. Steeper increases could also touch the 7355 barrier shifting the long-term bearish outlook to a more neutral to bullish one.
In the medium-term picture, the Bitcoin price remains in a bearish mode as it holds in a descending reversal pattern, which suggests that the next move could be to the downside rather than to the upside.
by Melina Deltas, XM Investment Research Desk
Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities.
Melina studied Pure Mathematics at Lancaster University and has a Master’s Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).