Bitcoin Price Analysis: Will the Price of Bitcoin Continue to Rise?
Last week we wrote about the 100-day Moving Average (MA). That is a moving average of the past hundred days. This line also plays an important role in today’s price analysis. Curious how? Read on.
Recap: First resistance, now support
An MA line can often give you valuable information about the course. It is a so-called ‘lagging indicator’ because it mainly looks at data from the past. But with this indicator it is also possible to get a picture of the present and the future, the MA can indicate important zones.
What does the MA say about the price of Bitcoin?
- From the beginning of 2018 up to and including February 2019, the 100-day MA mainly served as resistance. This means that the price did not easily come up here. Every time the price did rise, it quickly dipped again. The last attempt is indicated by the red arrow.
- Now the 100-day MA seems to serve as support. The price of Bitcoin has not fallen below the line so far. The course has made two attempts to break through this line, which is called ‘testing’. The graph below shows this with the green arrows.
Bitcoin has therefore tested the MA twice, and the course is still well above the line. Is this a precursor to an increase in the longer term?
Now: Golden cross on the way?
But what if you combine two MA lines? In that case, you look at the interaction between the short and long term. In the graph below we look at the 50-day MA (green) and the 100-day MA (orange).
We see two things:
- In October 2018 the green line will dive below the orange line. Or in other words: the line of the short term dives below that of the long term. This is called a ‘death cross’, and that may indicate a decline in the future.
- Now the green line appears to be above the orange line. The 50-day average rises faster than the 100-day average. We call that a ‘golden cross’. This may, in fact, indicate a rise in the future.
The difference between the 50-day MA and 200-day MA is often used for a golden cross. It will take a while before the time comes, but this golden cross between 50 and 100 on 12 March is certainly a positive sign.
Also positive: hammer time!
Huh, hammers? You don’t have to grab your toolbox yet, this is about candles on the daily chart. Sometimes a single candle can also say a lot about the course of the price. In the graph below we highlight two types:
- First, we see a shooting star. That is usually a precursor to a fall. Prior to a shooting star, a rise in the course takes place. With a shooting star, the course has reached a top, but the candle does not fall or rise little. The buyers have lost control of the rise, a fall is in the offing.
- Then we see a hammer. That can be a precursor to a rise. The price is first in a falling trend. With a hammer, the price has reached a considerable low point, but the candle does not fall or rise very little. The sellers lose the upper hand, and the buyers take over control again. That may indicate a price increase.
Will this hammer be a harbinger of a further rise in the Bitcoin rate? We will see that in the coming days.
Important support in the short term
In the short term, we see that the price of Bitcoin has reached support. This support is indicated on the graph below with the green rectangle. Each candle on this graph represents one hour.
- In February the rectangle was still a resistor. The value of Bitcoin did not exceed this zone.
- Now this zone forms a resistance. Bitcoin is unable to get under the rectangle.
This is reinforced because the RSI indicator was oversold. The bottom graph shows that the purple line ended up just below the purple rectangle (indicated by a green circle). That means that a relatively large amount of Bitcoin has been sold and that the price has provided clear support. From here, the exchange rate is a good basis for rising.
What will the Bitcoin course do?
After our previous course analysis, the course made another jump up. However, the same zones still remain interesting. It can freeze or thaw, so we discuss two different scenarios: bullish (positive) and bearish (negative).
Bitcoin keeps rising. Then the rate encounters a resistance between 3,640 euros ($ 4,110) and 3,730 euros ($4210). On February 24 it was not possible to break through this resistance. Will, that succeeds in the coming week?
But if Bitcoin falls, the exchange rate will be between 3,200 euros ($3,610) and 3,300 euros ($3,720). This zone was also tested at the end of February and the beginning of March. If the rate again tests this zone, but without success, the previous support levels will be active (between 2,800 and 2,900 euros / $3,160– and $3,270).
DISCLAIMER: The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
Author: Marko Vidrih
Charts via Coinbase
@cryptomarks (@VidrihMarko) | Twitter
The latest Tweets from @cryptomarks (@VidrihMarko). Freelance Journalists/Writer and Crypto enthusiast. Republic of…
Read about our upcoming Altcoin Magazine Mastermind Event here.