TA of the Day: Bitcoin Fails to Hold Above 60,000! Will the slide continue?

Bitcoin price failed to hold above 60,000 on Wednesday.😔

The decline followed a brief rally after Federal Reserve Chairman Jerome Powell’s recent speech at Jackson Hodl, err Hole.

The past three months have been tough for orange pill users around the world, with bitcoin falling more than 12% and its continued failure so far to retest its most recent all-time high of nearly 74,000 reached earlier this year.

Analysts suggest that profit-taking by crypto traders and low trading volume this time of year could contribute to the decline.

Despite this, bitcoin continues to see inflows into US spot bitcoin ETFs, indicating sustained investor interest. However, concerns that the US government could sell seized bitcoins could put additional pressure on prices.

The recent correction may also signal a return to more stable levels after the initial boost from anticipated Federal Reserve interest rate cuts.

How about the technical outlook of bitcoin?

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Welcome to TA of the Day (TAOTD)! 👋

Let’s focus on the current technical setup of bitcoin (BTC/USD) based on the daily chart:

📈 BTC/USD Daily Chart Technical Analysis

Let’s analyze BTC/USD using key technical analysis concepts covered in our forex course.

Exponential Moving Averages (EMA):

• 10 period EMA: Positioned around 61,046.16. The price is currently below this level, indicating short-term bearish momentum. The down the slope suggests recent short-term selling pressure.
• EMA with 20 periods: Positioned around 60,940.00. The price is below this level, reinforcing the short-term bearish trend. The down The slope of the 20-period EMA indicates increasing bearish momentum.
• 50 period EMA: Positioned around 61,575.91. The price is also below this level, confirming the bearish momentum in the medium term. The down the slope suggests that the medium-term trend favors the bears.
• 200 period EMA: Positioned around 59,613.08. The price is currently almost this level, indicating that the long-term trend is being tested. The slope is relative flatsuggesting a possible area of ​​support.

Keltner channels (KC):

• Upper band: Positioned around 66,434.81. The price is good below this level, indicating that the recent price action has been bearish and closer to the middle and lower bands.
• Middle line (20-period EMA): Positioned around 60,940.00. The price is currently below the middle line of the Keltner Channel, indicating a bearish trend.
• Lower band: Positioned around 55,445.19. The price is closer to the middle of the channel, indicating that there is potential room for further decline towards the lower band if the bearish momentum continues.

Moving Average Convergence/Divergence (MACD):

• The MACD line (2.47) is above the signal line (-161.27) Both lines are above the zero line.

• The histogram is positive but falling, suggesting a weakening of bullish momentum.

🕵️ Key observations

Price action:

Let’s look at bitcoin (BTCUSD) price action since its last high in late July:

1. Swing High at the end of July: The price hit a local high of around 70,000 in late July.
2. Initial withdrawal: Following this peak, there was a sharp pullback. The price dropped to around 65,000, creating a significant red candle.
3. Consolidation: After the initial decline, the price consolidated around 65,000 to 68,000 for several days, forming a series of smaller-bodied candles.
4. Renewed selling pressure: At the beginning of August, the selling pressure intensified. The price broke below the consolidation range, dropping to around 62,000.
5. Rejection attempt: There was a brief retracement attempt to around 65,000, but this was quickly rebuffed.
6. Sudden decline: In mid-August there was a dramatic drop. The price dropped from around 65,000 to a low of around 55,000 in a single day, forming a long red candle with a significant lower wick.
7. Volatile recovery: Following this sharp decline, there was a strong rebound. The price quickly recovered to around 60,000-61,000 in the following days.
8. Resistance to previous support: The 60,000-62,000 area, which previously acted as support, has now become resistance. Price struggled to break this level convincingly.
9. Trading by range: Bitcoin entered a range phase, oscillating between around 58,000 and 62,000.
10. Failed hacking attempt: There was a brief attempt to break above 62,000, but this was quickly rebuffed.
11. Recent downward pressure: The latest price action shows renewed downward pressure, with the price falling back towards the lower end of the recent range around 59,000.
12. Lower maxima: Each retracement attempt resulted in a lower high compared to the previous peak, indicating a weakening of bullish momentum.
13. Higher minimums: Despite the overall downtrend since the July high, the price has made slightly higher lows since the mid-August decline, potentially forming a descending triangle pattern.

In summary, price action since the end of July has been predominantly bearish, characterized by a series of lower highs and increased volatility.

The market has moved from a clear uptrend to a more uncertain, range-bound environment with a slight downtrend. The price is currently consolidating in a tightening range, suggesting the potential for a significant move once this range is broken in either direction.

Key Levels:

• 60,000: Important psychological level and close to 20 EMA
• 65,000: Recent resistance level
• 55,000: Strong Support Level (Lower Keltner Channel)

Support and resistance levels:

• Major resistance: $65,000-66,000 (recent highs and upper Keltner channel)
• Immediate resistance: 61,000-62,000 (20 and 50 EMA)
• Immediate support: Around 58,000-59,000 (recent lows and 200 EMA)
• Strong support: 55,000-56,000 range (lower Keltner channel and previous lows)

🤔 Potential commercial scenarios

Is BTC/USD a buy or a sell?

Long bias:

• Point of consideration: Consider entering a long position if the price finds support at the 200-period EMA and begins to show signs of a reversal, such as a bullish divergence in the MACD or a strong bullish candlestick pattern.
• Invalidation point: Consider setting a stop-loss below the 200-period EMA at around 59,000 to manage risk.
• Potential target: Look for a move back to the middle Keltner Channel line at 60,940 or higher if a reversal occurs.

Motivation: The 200-period EMA could act as a strong support level, and any sign of a bullish reversal could present a buying opportunity, especially if broader market sentiment improves.

Short bias:

• Point of consideration: Consider entering a short position if the price breaks below the 200-period EMA at 59,613 or if there is a bearish continuation pattern on the lower time frames. Another potential entry point is a rejection at the 10-period EMA.
• Invalidation point: Consider setting a stop-loss above the 20-period EMA at around 61,000 to manage risk.
• Potential target: Look for a move to the lower band of the Keltner channel at 55,445 if the downtrend continues.

Motivation: Strong bearish momentum, confirmed by the MACD and the price position below the Keltner Channel midline and all key EMAs, suggests further downside potential. The 200-period EMA is a critical level to watch as a break below it could lead to a significant sell-off towards the lower band of the Keltner channel.

📝 Summary of TAOTD

Bitcoin is showing a mixed trend with recent volatility and short-term bearish momentum.

• Current position: Price is in a downtrend, testing the 200-period EMA for support. Bearish momentum is confirmed by the MACD and the price position below all key EMAs and the Keltner Channel middle line.
• Trend: The overall trend is bearish, with the price below the 10, 20 and 50 period EMA. The 200-period EMA is a critical level that could determine the next significant move.
• Support/resistance Support at 59,613 (200-period EMA), with resistance at 61,046 (10-period EMA) and 60,940 (Keltner Channel midline).
• momentum: The MACD indicates strong bearish momentum, with the potential for further downside if the price breaks below the 200-period EMA.

Bitcoin is in a consolidation phase and its market structure suggests that it is at a critical situation.

The long-term uptrend is caused by short-term bearish pressure.

Be cautious as the current structure suggests potential for a significant move in either direction once the consolidation phase resolves.

Recent bitcoin price action shows a the fight between buyers and sellerswith a short-term bearish trend evident in the most recent movements.

The tight clustering of EMAs and position in the Keltner channel suggests that the market appears to be in a state of indecisionwith significant resistance around 60,000-61,000 level and support around 57,800-58,000.

The failure to break higher and the recent dip below the 20-day EMA suggests that the bears may have a slight edge in the very short term, but the overall picture remains mixed.

👀 You should watch the 200 period EMA carefully.

The price interaction with the 200-day EMA and the resolution of the current range will likely determine the next major trend direction.

A break below this level could signal a further decline towards the lower band of the Keltner channel, while a reversal at this level could provide a buying opportunity.

This content is for informational purposes only and does not constitute investment advice. Trading any financial market involves risk. Please read the Risk Disclosure to ensure you understand the risks involved.