Bitcoin Price Analysis: Small Bump Seems Likely

After another successful Bitcoin price forecast that panned out, we’re back to take another look at Bitcoin and see where things may be headed next.

In the chart above, we can see that the price action for Bitcoin is revealing what would appear to be a ‘double top’ chart formation on the daily resolution.

However, this is a bearish reversal formation. Therefore, the chart pattern is at its most valid when there has been a period of sustained increases preceding its occurrence.

In either case, we can at least tell that the price is resting on a firm support currently in the $3.6k-$3.7k range.

Looking at Our Chart from the Last Price Analysis

The drawings on the chart you see above are what were left from the last time we analyzed Bitcoin.

As you can see, our theory was that Bitcoin was trading in a symmetrical triangle and that the price would eventually break south of the apex. From what we can see above, this actually happened perfectly.

Bitcoin is currently right at that support point (at the time of writing).

Obviously, the highest green dotted dash line on the chart is at an inaccurate location (slightly above where the price is currently).

However, we can go ahead and amend this:

While the chart does show the next support point is at $3.2k, it should be noted that there is an intermediate support that can be seen on the H4 resolution as well:

Relative Strength Index(14)

This is going to be the key indicator for us to look at in order to get a better idea of where the price is going next.

Let’s check on the RSI(14) on the H1 resolution first:

The positive divergence identified in the chart above really makes no material difference for the conclusion of our price analysis. So, we’ll let that go for the time being.

However, it is worth noting that the RSI(14) has risen substantially on the H1 resolution.

The same can be said for the H2, H3, and H4 resolutions as well.

For that reason, we’ve provided an overhead resistance point on those lower time frames to set a trajectory for where the price could most likely reach on a re-test before descending lower.

Relative Strength Index(14) on the Daily Resolution

Relative Strength Index(14) on the Daily Resolution
Despite the rosy outlook from the RSI(14) on the lower time resolutions (H1, H2, H3, and H4), the same cannot be said of the daily resolution (as well as the H12; but we will not cover that here in this price analysis).

This can be seen in the chart below:

The caption in the picture above conveys all the necessary information about the RSI(14) on the daily resolution.

In a nutshell, there has been a sustained trend upward for the RSI(14) oin the daily resolution. But it appears that this trend is now in danger of not continuing.

Another major point worth noting is that the RSI(14) has not risen above the value of ‘58’ since late August/early September:

We’ll have to monitor the RSI(14) on the daily resolution for the next few days to see what (if anything) occurs.

Conclusion

For the time being, it appears as though there may be a slight bounce in the price for Bitcoin. However, nothing is guaranteed. There is a chance that the price does fall lower to $3.4k. A major drop is not anticipated.

Therefore, our idea for Bitcoin is to take a long position.

Below is the R/R for the trade:

Trade closed manually:

This idea ended up busting :(

Second wrong one this year. Should have went with my gut instincts on this.