Bitcoin TA: Daily Chart Analysis End of Q3 2018

Bitcoin (BTC) Daily Chart Q3 2018

Looking at the daily price chart, I’m observing a massive descending triangle that has been playing out since the current downtrend started back in December. There was a huge sell off for two months following the peak at $19K before bouncing hard off the resistance point around $5875.

The significance of this support at $5875 cannot be stressed enough. Looking at the chart we see that with each attempt to run up, there is an increasing amount of pressure pushing the price down to this point and it has been rejected every time.

Bitcoin (BTC) Daily Chart Q3 2018
Bitcoin (BTC) Daily Chart Q3 2018

It appears to me that Bitcoin is ready for either one last attempt to break the trend line, or its going to fall straight through the floor. If Bitcoin is to remain in a bear market, price will likely get rejected at the trend line and finally break $5800, sending it into a trading range with a potential bottom of $3000.

If Bitcoin is ever going to see $10,000 and above, it needs to break the historical trend line with significant volume around $7100. With market sentiment at a low, if no buyers come in soon to attempt the next run up, its possible there will be no attempt to break the trend line and price falls straight through the $5800 level.

A bull market will be confirmed with a bounce off of this line, price will likely test the $9300 range in this case before breaking $10,000. Volume will be key in this case, daily volume ranges of $6,00,000,000 and above would confirm an uptrend and the market will enter a new pattern.

Looking at 4 Hr technical indicators, the RSI and MACD both show signs of bullish divergence which gives bulls a glimmer of hope to bulls. Momentum seems to be building while price has been making lower lows over the past two weeks of activity.

Bitcoin (BTC) 4 Hr Momentum and Price Q3 2018
Bitcoin (BTC) 4 Hr Momentum and Price

The RSI is recovering from a double bounce off the oversold regions and is now looking to cross over the 50 line. A bounce off of 60 is likely but support at 50 would indicate a slight bullish bias. Histogram has yet to enter the negative side despite the recent sell off. The last three days have shown a consecutive increase in upticks.

Looking at moving averages, the 200 EMA is well below the 100 EMA which indicates an extremely powerful downtrend. What is most interesting here is that the 100 EMA is aligning with the historical trend line, illustrating how powerful moving averages are.

Bitcoin (BTC) 4 Hr Moving Averages Q3 2018
Bitcoin (BTC) 4 Hr Exponential Moving Averages

In my opinion, an attempt to break the trend line one last time is more likely than a fall through the floor. However, without a massive inrush of buyers, the likelihood of breaking the line is low and the market could retest $5,000.

Next week will be critical for Bitcoin and the first of the month is a beautiful time for a mini bull run to start. Keeping my fingers crossed, I will likely post another update next week once more data comes in.