Weekly Chart Points to a Retreat to $35,000 in Bitcoin, Before Pushing to New Highs

Bitcoin started the bearish crash in cryptocurrencies in May, when it dived from under $65,000 to $29,000, and it also started the bullish reversal in cryptocurrencies this month. The bullish reversal came after the 50 SMA (yellow) caught up with the price on the weekly chart.

BTC/USD was severely oversold, as the stochastic indicator shows, while now, after gaining around $19,000, this indicator has reached the overbought area on this chart. Besides that, the 20 SMA (gray) is acting as resistance for Bitcoin now.

This sort of chart setup on the weekly time frame points to a bearish reversal and a retreat down to the 50 SMA once again. If that happened, Bitcoin would be very tempting to buy, since it would be oversold by that time, and the 50 SMA would offer support again. But traders would fear a further retreat to around $30,000 if Bitcoin fell to the 50 weekly SMA.

The 200 SMA might offer support on a pullback lower for Bitcoin

So, we will follow the price action if the price gets there, and see if it forms a bullish reversing chart pattern. However, before that, there are many other levels to watch, to see if the retreat ends there. The 200 SMA (purple) on the daily chart, which acted as resistance during the bearish period, has already turned into support. Below that is the top of the range during the same period, at around $42,000, and then comes the big round level at $40,000.

BITCOIN has shown signs of fatigue in recent days, with gains slowing down and failing to push to $50,000. This indicates some profit-taking after the bullish run that has lasted almost a month. This also supports the idea of a deeper pullback lower, although no one can guess right now where it might end.

In India, the central bank of the country, the RBI Reserve Bank of India, is going to decide soon whether to ban Bitcoin or list it as an asset class. I think that the latter will win, but this might be a factor in this latest retreat.

Bitcoin Live Chart

BTC/USD
Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

HFM

Doo Prime

XM

Best Forex Brokers