Bitcoin Price Has Failed to Overcome These Points Repeatedly
Updated
Bitcoin price has been performing well recently. The last three weekly candles have closed with increases recorded and this week has brought the price of bitcoin back above $4000 and looks likely to close with an increase.
But bitcoin has risen to a point that it has failed to overcome time and time again. Since March of 2018, the price has failed to overcome a downward trendline it has tested on numerous occasions. The last significant test of the downward trendline was in November where price failing to overcome the trendline resulted in a depreciation of almost 50%.
Price is once again approaching this point and has been exhibiting similar behaviour to price action leading up to the November drop. Price has been consolidating since December forming both lower highs and higher lows. Similarly, the price was also consolidating forming both lower highs and higher lows in the months leading up to November. This may not mean that price is going to react in the same way but it does mean that the downward trendline deserves to be monitored.
Price has also found seller liquidity on numerous times over the past few months between $4070 and $4250. We will be looking to enter a short position just below this territory at $4060 if the price can continue to rise to this point. We are setting our stop loss above this territory at $4290. We have set this just below $4300 as there can be more significant slippage at psychological points such as prices with round numbers like $4300. Our profit target will be $3780 which will be just above the FTA we expect at $3768. Price has met support at $3768 numerous times over the past week. This trade gives us a risk to reward ratio of 1.22 meaning this trade needs to be right at least 45% of the time to be profitable.
Some further reasons we are taking this trade:
Price is trading at the monthly 50 EMA which it had failed to close above when the February monthly candle closed. Selling pressure came in to bring the price back below this point before February finished. The monthly RSI is also trading near all-time lows showing selling pressure has been high.
Price is also trading at the 200 EMA which seems to have acted as resistance on numerous times.
We will keep you good folks updated on whether this trade becomes active and how we manage it if it does. Let us know your thoughts in the comments and check out our newsletter to get analysis straight to your inbox.
Trade active
This trade is now active five days after posting the analysis.
Almost a picture perfect entry for this one with a sharp sell-off taking place upon reaching the target.
Get the latest analysis to your inbox adaptiveanalysis.substack.com
Find out our services at adaptiveanalysis.io
Tweet at us @adaptiveIO
Find out our services at adaptiveanalysis.io
Tweet at us @adaptiveIO
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.