BTC Falls Beneath Ascending Price Channel From Overbought RSI

• BTC is down by a small 4.5% today as the cryptocurrency slips beneath $40K again.
  
  
• The cryptocurrency reached a two-month high over the weekend as it hit $42,560.
  
  
• Since reaching this high, the coin has rolled over to break beneath the ascending price channel it was trading inside.
  
  

Bitcoin rolled over by 4.5% today as the cryptocurrency falls beneath an ascending price channel it was trading inside and broke beneath the $40K level. Despite today’s price drop, BTC is still up by a whopping 13% over the past month of trading. It had managed to reach a fresh two-month high price over the weekend as the coin reached as high as $42,650.

Bitcoin Price Analysis


What has been going on?

Taking a look at the daily chart above, we can see BTC breaking the descending wedge formation over the previous fortnight and kickstarting a rally higher. As it broke toward the upside of the wedge, it started to surge inside an ascending price channel - highlighted by the dashed lines.

The price of BTC surged inside this ascending price channel, and it allowed the coin to pass the 100-day EMA level over the weekend and to set a new 2-month high price at around $42,560 - not seen since late-May 2021.

Unfortunately, BTC was unable to overcome this resistance and rolled over from there yesterday to meet the support at the lower angle of the price channel and the 100-day EMA. Today, it continued lower, breaking beneath the lower boundary of the ascending price channel and hitting support at $39,450 - provided by a short-term .382 Fib Retracement level.

Despite the price channel breakdown, the surge allowed a bullish crossover signal of the 20-day EMA and the 50-day EMA for the first time since before May.

A retracement is healthy at this moment after the market hit extremely overbought conditions on the RSI for the first time since early March. The key now is for BTC to create a “higher low” price, preferably around $37,000 (20-day MA), before rebounding higher to break the August 2021 high at $42,560.

Bitcoin price short-term prediction: NEUTRAL

Bitcoin still remains neutral in the short term and would have to break above resistance at $42,000 to start to turn bullish again. On the other side, a closing candle beneath $30K would turn the market bearish again.

If the sellers do break the current $39,450 support (.236 Fib Retracement), the first support below lies at $38,000. This is followed by $37,000 (20-day EMA), $36,660, $35,920 (.5 Fib Retracemnet), and $35,000 (50-day MA).

Where Is The Resistance Toward The Upside?

On the other side, the first resistance lies at $40K (100-day EMA). This is followed by $40,560 (bearish .382 Fib Retracement), $42,560 (August highs), and $44,120 (bearish .5 Fib Retracement).

Additional resistance lies at $44,750 (200-day EMA), $46,100 (1.272 Fib Extension), and $47,820 (bearish .618 Fib Retracement).