In the past week, after a sharp drop to the $5,800 level, Bitcoin shows signs of resilience holding strong support and consolidating around the $6,300. As of press time, Bitcoin trades at the $6,350 level, total market capitalization is at $208 billion, and year-high level 52.7% Bitcoin dominance. Bitcoin dominance indicates that altcoins are currently on huge discounts and are at oversold levels.
Looking at the graphs, price action is still on major downtrend, but strong support holds around the $5,800 level where price made a successful bounce. Bitcoin price is currently consolidating at the 0.786 Fibonacci level with further horizontal price action seen in the next few days. Momentum is still not making a decisive upward shift with sellers still in control. Looking at the RSI, market sentiment bounced from the oversold region and is attempting to shift to upward momentum as bulls are looking to re-enter the market. The Fibonacci Retracement levels indicate that there is strong resistance at the next price target at the $6,800 mark around the 0.618 Fibonacci level. The Bollinger Bands indicate that Bitcoin bounced from the bottom Bollinger band heading towards the middle Bollinger Band, which coincides with the 0.618 Fibonacci level. The coinciding 0.618 Fibonacci level and middle Bollinger Band forms double resistance for Bitcoin price action.
In a nutshell, a successful break above the 0.618 Fibonacci level could spark Bitcoin recovery, but multiple resistances make it difficult for price action to rally upward. In the short term, Bitcoin is expected to continue horizontal price movement before making a decisive move upward or downward. If RSI continues to move upward accompanied by MACD crossing over the signal line, we may see an upward recovery of price.
Summary of Key Points:
- Price action is still on major downtrend with price consolidating around the $6,350 level at the 0.786 Fibonacci level.
- RSI and MACD indicate that price action is still in favor of the sellers and momentum is attempting an upward shift.
- Middle Bollinger Band and 0.618 Fibonacci level coincide to form double resistance.
- A successful break above the double resistance could spark Bitcoin recovery.
(DISCLAIMER: This is not financial advice. The analysis and recommendations provided here are based on my own research and personal opinion. Trade wisely!)