Bitcoin Technical Analysis

Bitcoin's next local bottom might be around the corner.

Bitcoin trended down for the past five months and recently bounced off heavily its major support zone at around $6.300. Neither the RSI nor the MACD show signs of a bullish reversal. At the current stage, it seems likely that Bitcoin will most likely continue its downtrend. Before that, however, it might reach up to the major resistance around $9.500, where both the Fibonacci extension and Fibonacci retracement 0.382 level act as resistance. Additionally, the high from April 2018 acts as additional resistance. Yet, Bitcoin still needs to break the 0.5 fib level at $8.500 before it might re-test the 0.382 fib levels.

Furthermore, it can be observed that the current bounce is the second attempt of the golden ratio to successfully hold as support. A bounce off this level is considered bullish. However, Bitcoin was recently rejected by the 0.382 fib level, which is bearish.

In summary, the upcoming weeks will act as a significant indicator. Either Bitcoin fails to break the resistance at the second attempt, then Bitcoin will most likely fail to hold the support at the third attempt. A break of the 0.382 fib level at around $9.500 would, however, initiate a trend switch and Bitcoin’s trend could be considered bullish again.

For now, the outlook is rather bearish. It seems likely that Bitcoin will be rejected by the 0.382 fib level. This, however, implies another uptrend potential of around 25 percent.

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