Bitcoin Price – Range Bound
The king of cryptocurrencies, Bitcoin (BTC), is mostly found trading in the green these days, with only a few days where the bears outnumber the bulls. Bitcoin’s price is down 9.5% since the beginning of the month. However, it is also up over 20% since its lowest close so far this year (April 1st). Currently, the overall market sentiment regarding Bitcoin price movement remains range-bound within the key resistance ($11,548) and support ($6,560) levels. Presently trading at around $8,230 (on May 20, 8:00 UTC), Bitcoin price analysis reflects a short-term downswing, with the price gradually approaching a key Fibonacci level which may offer immediate support, and provide investors with a good entry point. However, if and when, this immediate support is broken, Bitcoin could find its next speed-breaker at the key support level of $6,560.
Bearish Crossover in Sight
Let’s first firm up our views on market sentiment. Technical indicators reflect a flat 50-day SMA (simple moving average) line and a downward sloping 14-day SMA. Hence, continuing with their respective trends these moving average indicators could lead to the formation of a bearish crossover. The 14D SMA crossing the 50D SMA from above would indicate a short-term bearish investor sentiment. Moreover, lower highs and lower lows being recorded recently also suggest a bearish sentiment in the market for now.
However, the strength of movement of this recent downswing isn’t too strong, as validated by the momentum indicator, the RSI (relative strength index). The RSI is presently around a 42.6 index level, below the average 50, reflecting weak strength in movement. So, investors may expect a reversal at support levels.
Golden Ratio Could Serve as an Entry Point
Now, Fibonacci retracement analysis points to a key support level at the golden ratio of 61.8% which coincides with a $7,787 Bitcoin price level.
Investors and traders looking for suitable entry points into Bitcoin (BTC) should watch the $7,787 level. The price level is expected to provide immediate support to the downswing, breaching which, the next support could be found at around the $6,560 level.
Take note that the medium-term downward sloping trend line (diagonal green line in the chart above) for Bitcoin (BTC) was already broken on April 12th, indicating a shift in aggregate market sentiment from being bearish to bullish for Bitcoin (BTC). Also, both the support levels lie above the long-term trend line, indicating an overall intact bullish sentiment with respect to Bitcoin.
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