By John van Meer (The Bitcoin Consultant) – The price of bitcoin (BTC) reaches 12,000 euros today. In dollars, BTC breaks the 14,000 mark.
At the time of writing we are again below both milestones. In fact, the price temporarily dropped below $13,800 again.
The price saw a lot of volatility this week between $12,900 and $13,864. Can the resistance at $13,880 be supported for a further rise this weekend?
Bitcoin price week graph
The monthly graph (figure 1) looks very nice. The price continues to break in these uptrend resistors. It is currently close to the highest monthly closing of a candlestick ever. If the price is able to close above $13,880 tonight, it’s quite possible that the price will continue to rise considerably in the coming weeks. There are not many strong resistors besides $16,000 on the weekly and $17,234 on the monthly.
On the weekly chart (figure 1) there are a number of bullish and bearish points.
In the bullish scenario there is an inverse head and shoulders (green, LS, H, RS) that is now breaking the neckline. If that support can be made the technical target is $20,500.
Even if it doesn’t become a valid pattern, the weekly chart looks bullish after four weeks of green. However, a healthy pullback is possible here. Perhaps in the form of a weekly bull flag, now that the RSI is also overbought. Support points are $12,500 (0.382 fib) and $12,000 (0.5 fib) and $11,500 (0.618 fib).
In the bearish scenario there is also rising wedge to see what a bearish pattern is. Although the technical target at the bottom is around $4,000 I don’t expect that to happen. Support from the bottom red line should hold around $11,500 – $11,150 to remain bullish. Invalidation of the rising wedge is when the price can go above $13,3880 and that makes support.
In addition to the rising wedge pattern there are a number of other bearish points. The price runs against the fibonacci golden pocket resistance which used to be resistance as well (blue rectangle). The RSI is overbought and the volume is not very high.
Bitcoin price day chart
On the daily chart (figure 2) the price moved between $12,920 support and $13,864 resistance for most of the week.
The $13,880 has just been broken and if that support can be made and the price closes above last night it is very bullish. However, the price can still dip after that, it will soon be bought up as we will see at dips for the rest of the week.
The RSI remains overbought, and as you can see in the bottom beam it never stays that way for very long. So a pullback here is definitely on the table. If the support of $12,900 breaks, we can look at $12,300 and $12,000 for support.
$12,000 has merge with the weekly 0.5 fib, support on the daily (green bar) and daily golden pocket region and is therefore a strong support. Before thinking about this scenario we need to break the $13,250 on the 4 hour chart (below).
Bitcoin price 4-hour chart
On the 4 hour graph (figure 3) two bearish aspects can be seen. A rising wedge and a potential double top in red. The rising wedge has a technical target of $12,980, but can still find support at $13,320. The double top could bring the price to the 100MA around $12,500.
Both bearish patterns are invalidated if the price can rise above $13,880 and that creates support according to the green line. Otherwise it becomes a fake out of the rising wedge. If it does create support, the following targets are $14,395, $14,500 and the 2,618 fib at $14,890.
What will the price do?
The price looks bullish on the higher time charts and may rise towards the $16,000 and $17,000 over the next few weeks after a healthy pullback.
However, we have to take into account a pullback because of the bearish points that have been mentioned. If the $13,880 can be broken and support can be made then we can quickly see the $14,395 to $14,890.
It is quite possible that this weekend we may experience a fake-out above the rising wedge and fall back into the range between $13,319 and $13,880.
John of More
The Bitcoin Consultant, John van Meer, has been teaching the general public about cryptocurrency for years through webinars and seminars and online courses. The latest is the online trade course that teaches you how to read charts and use tools to trade!