On Apr 2, 2019, Bitcoin (BTC) began an upward move which took it from $4169.17 to $4790 within an hour. Price has gradually increased since.
On Apr 3, it appears that Bitcoin reached a peak when a high of $5345 was reached. Subsequently, prices retraced as part of a short reversal.
At the time of writing, slight gains above $5000 were observed.
Now that Bitcoin has been trading above $5000 for more than one day, what will happen next?
In this analysis, we hope to answer this question while offering reasonable price predictions for the near future.
Bitcoin (BTC): Trends and Highlights For April 4
- BTC/USD had been trading inside an ascending channel since Apr 2.
- Bitcoin broke down from this channel on Apr 4.
- The breakdown occurred with significant volume.
- There is now support near $4800 and $4700
On Apr 2, the price made an hourly low of $4680.36. It has been gradually increasing since, making several higher lows. Tracing these lows gives us an ascending support line:
On Apr 2, Bitcoin made a high of $5080 before closing at $4738.61. Since then, several market cycles have been completed and the price has made several higher highs.
Tracing these highs gives us an ascending resistance line.
The resistance and support lines combine to create an ascending channel:
Bitcoin broke down from the channel on Apr 4, 2019.
Was this a valid breakout or will Bitcoin rebound inside the channel?
To better assess future price fluctuations, we incorporate technical indicators into the analysis. We begin with volume
On Apr 3, the price reached a high of $5345. A rapid downward move began which took it to a low of $4800 in a span of three hours.
The breakdown occurred at a significant volume—more than twice the average hourly volume.
Using this indicator, we can conclude that the breakout was legitimate and the price is likely to create new resistance and support areas below the channel.
The closest support area is found near $4800, followed by the support area near $4700.
It is likely that the price will fall to at least one of these areas before it creates a different trading structure. We also believe it is possible that BTC/USD rises to touch the support line of the channel before falling.
Summary of Analysis
Based on this analysis, the price of BTC is likely to undergo a slight correction and decrease to the area outlined above It is not yet clear on what time-table this will occur.
Do you think BTC will drop towards the support area? Let us know your thoughts in the comments below!
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.