Bitcoin Price Must Now Break $8.2K to End 6-Month Losing Streak
While #Bitcoin (BTC) is in a range between $6,800-$8,200, some altcoins have shown impressive movements during the past week. Some examples are MATIC (+83%) and RVN (+46%). These movements generally occur during low volatility periods in Bitcoin.
Now that Bitcoin is attempting to rally above $7,600, into its previous trading range, new analysis and perspectives are needed in order to see if the market can provide continued upside movement for altcoins.
Bitcoin stuck in a bearish range
Bitcoin’s trend still favors the downside as is shown in the 12-hour chart below.
The trend is still down where lower highs and lower lows are created. However, the price temporarily found a bottom at $6,500-$6,800. Since that bottom formation, a range is defined between $6,800 and $7,800, in which the $7,800 area is the upper resistance zone.
Another indicator providing range-bound confirmations is the decrease of volume within such a range. During the dropdown from $8,400 to $6,500 the price started to accelerate, which caused the volume to increase. However, the moment the price is inside a range, volume usually decreases and goes away. The consequence is that the weird “Bart Simpson” pattern happens and liquidation hunts occur.
Why? The volume is overall lower, which also means that order books are thin. This results in more effortless stop hunt movements as the required volume to execute such a move is much lower.
The 4-hour chart is showing the same range levels. The price couldn’t clear the $7,800 resistance, through which the price retraced towards the green area around $7,000 for a support test.
This confirmed support (including bullish divergences on smaller time frames), and the price moved back up towards the upper parts of the range in the $7,800 area.
The $7,400 level is most important for now as this is a healthy horizontal level where the price needs to hold to justify a continued trend upwards.
The 2-hour chart shows a falling wedge construction, which led to the breakout to $7,800.