Are Bitcoin Bears Gaining Strength or Bulls Retreating To Take a Leap?

Source: Andreanicolini, Shutterstock

Summary

  • Bitcoin has shed ~26.19 percent from its lifetime high.
  • Bitcoin prices are trading in a rising channel formation on the daily chart.
  • Prices are moving in a horizontal channel pattern on the weekly chart and getting support from the 21-period SMA.
  • Bitcoin price is facing strong resistance of upper band of channel pattern and the RSI (14-period) has formed a negative divergence.

Bitcoin in just 3 months had rallied ~ 125.77 percent  from the low of USD 28,745.55 made on January 2021 to a new lifetime high of USD 64,899.97 tested on 14 April 2021. However, recently post the popular cryptocurrency exchange -Coinbase IPO, Bitcoin prices have been under pressure as investors hit the sell button and booked profit. The prices declined by 26.19 percent to USD 51,431.10 on 18 April 2021.

Read: Why are cryptocurrencies tumbling after stellar run last week?

Copyright © 2021 Kalkine Media Pty Ltd.

Despite the correction, Bitcoin price is trading in a strong upward trajectory, forming a series of higher tops and higher bottoms, which indicates bulls are still in action. The momentum is strong as far as cryptocurrencies are concerned, Dogecoin has also surprised the investors with a huge upsurge in price.

Read: Coinbase is going public: Everything you need to know

Bitcoin Technical Outlook on a Daily Chart

Source: Refinitiv, Thomson Reuters; Analysis: Kalkine Group

The prices are trading in a rising channel pattern for the last three months and currently, hovering around the lower band of the pattern. The prices are trading above the horizontal trendline support level of USD 51,034 (black color horizontal line in the above chart) and continuously taking support of the same. Besides, the price is trading above its 100-period SMA, which is providing a crucial support below the channel pattern.  

However, the momentum oscillator RSI (14-Period) is trading at ~46 levels which suggests a sideways to downside direction for the cryptocurrency. The price is trading below its Parabolic SAR indicator, acting as a resistance zone. MACD is also showing a negative crossover, indicating that further correction is possible.

Bitcoin Technical Outlook on a Weekly Chart

Source: Refinitiv, Thomson Reuters; Analysis: Kalkine Group

The prices are moving in the rectangle channel formation for the past three months and trading in the range of USD 50,510.72 to USD 62,894.48.  The cryptocurrency has broken out of the upper band of the channel pattern at USD 62,894 level but failed to surpass the resistance zone and the prices drifted towards the lower band of the pattern.

The price is well placed above its 21-period SMA, which is acting as an important support for the bitcoin. However, the momentum oscillator RSI (14-period) is trading at ~66.46 levels, indicating that a correction from here may drift the price lower towards the support zone. The major resistance level for the cryptocurrency is at USD 62,894 level. The prices are trading below the Parabolic SAR indicator, a crucial resistance zone.

The Bitcoin price seems to be in a primary uptrend; however further downside correction from current levels cannot be overlooked. Currently, the prices are holding the key support zone. The chart pattern suggests that there might be more action expected if the cryptocurrency breaks the crucial support levels or edges higher towards the next resistance level in the coming weeks.

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