Bitcoin (BTCUSD) price support found itself holding on by a mere thread for the past week. With the $3400 support level holding its ground it seems like BTC bulls have finally found the confidence to step in and push the price up higher.
The only question right now: is this a real breakout or yet another dead cat bounce?
BTC Shorts vs Longs
BTC short sellers have remained on the side of caution as is evident by the open current BTC/USD Short Positions. In fact, it is the other way around.
We can see that the trend of buyers increasing their position has continued since BTC/USD Open Long Positions reached their lowest point in October. If we put the two charts together side by side and draw a trendline, we can see that both buyers and sellers are very near their extremes. This could lead to even more indecisiveness and sideways movement for bitcoin as sellers and buyers battle it out.
BTC/USD Weekly Price Chart
It is well documented that this has been the longest bitcoin bear market to date. With that being said, a bearish bias might hurt you rather than help you at this point. Most market reversals happen in trading ranges.
The weekly BTC/USD seems to be setting up a textbook sideways pattern. The 200 Moving Average has done a great job supporting the price and the weekly MACD is near the point of a bullish crossover which should lead to further upside for the bulls. On a weekly scale, we don’t have a lot of resistance until the $6000 which should act as massive resistance once reached.
BTCUSD Daily Chart: Signs of a Pullback.
End of week rallies are generally found to be fakeouts more often than not. This time the breakout volume has been significant enough and follow through could very well push the price to $4100 which is the closest BTC resistance.
The recent breakout has provided some relief for the bulls. We expect the price to settle in a trading range between $3600-4000 short term. A sustained bullish trend does not seem likely at this time.