The weekly and daily timeframes on BTC give mixed signals and shed no light on which outcome is more likely.
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Bitcoin is approaching a key level
According to the results of the technical analysis of the weekly chart, the picture for BTC is mixed. On the one hand, price has been rising along an ascending support line since the beginning of the year.
Two declining highs (green icons) were formed during this time, which had long lower wicks and tested the strength of the rising support line. Both of these signs are considered strong bullish signals. Currently, the support line is at $28,000.
In July, however, price also formed a bearish candle with a long upper wick (red icon). This has tested the $31,000 horizontal area as resistance.
With this high, the weekly RSI formed a significant bearish divergence (green line).
What’s more, the weekly RSI formed a significant bearish divergence (green line) against this high. Such divergence occurs when price growth is accompanied by a decrease in momentum. This often leads to a downward movement.
All of the time.
Source: TradingView
The RSI is currently in a downtrend, which is a bearish sign. However, it still hasn’t fallen below 50, so we can’t talk about a bearish trend with certainty yet.
BTC outlook: up or down
Like the weekly timeframe, the six-hour chart is also giving uncertain signals. BTC price has been falling since July 13, moving within a descending parallel channel. Such patterns are usually associated with corrective movements, indicating the likelihood of a bullish breakout from the channel.
The fact that the price is trading at the top of the channel further reinforces the price’s upside chances. If that happens, bitcoin is likely to strengthen 7% towards the $31,000 resistance area.
Bitcoin is likely to strengthen 7% towards the $31,000 resistance area.
Yesterday, however, BTC bounced off the channel resistance line (red icon). If the downward movement starts, we can expect the price to fall to the channel support line at $27,500. This would represent a 5.50% decline and would bring the price closer to the long-term upward support line.
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Source: TradingView
The outlook for BTC will thus depend on whether the price breaks above the long-term resistance area of $31,000 or falls below the long-term ascending support line.
The first case is possible.
In the first case, a rise to $35,000 is possible, while in the second scenario, the price could fall to $25,000.