Bitcoin is witnessing unusual price movements this weekend as it approaches the close of its weekly, monthly, and quarterly periods. The largest cryptocurrency in the world hasn’t had a weekend this weak and volatile in years.
Bitcoin goes bearish… kinda
Taking a look at the BTC/USD trading chart, we see that the 50-period and 200-period moving averages are quite close together and mostly flat.
This means that Bitcoin has been trading in a narrow range with no major price movements in either direction in the short term, hinting at a consolidation before a potential breakout or breakdown as the time closures approach.
The Bollinger Bands, set at 20 periods with a 2 standard deviation, are tightly packed around the price, which reaffirms the low volatility and tight trading range seen. Watch for a potential breakout above or below the bands as a sign of upcoming volatility.
The RSI is positioned at 63.98, indicating that Bitcoin is neither in the overbought nor oversold territory.
An RSI value above 70 would suggest overbought conditions (potentially leading to a price pullback), whereas a value below 30 indicates oversold conditions (a potential buying opportunity).
Related: Weekend Bitcoin trading drops to record low of 16%
The Fibonacci retracement levels drawn from a recent swing high to low show resistance and support levels. Currently, the price is testing the 0.236 level at around $61,727.20.
A sustained break above this level could see the price move towards the 0.618 level at $58,895.33, which could act as the next resistance.
The MACD is showing a bullish crossover with the line crossing above the signal line, which can be interpreted as a bullish sign. However, the histogram bars are relatively flat, meaning that while bullish, the momentum is not strongly pronounced.
A divided market
The Ichimoku Cloud has several components that give data on trend direction, momentum, and support/resistance levels. At the moment, it hints at a market divided, with neither the bulls nor the bears having full control.
The chart above shows:
- Senkou Span A and B (the Cloud): These lines form the “cloud” that is projected 26 periods into the future. The cloud appears green when Span A is above Span B, indicating bullish conditions, and red when Span A is below Span B, indicating bearish conditions. The cloud being red means the outlook is bearish in the near future.
- Tenkan-sen (red line): This is the conversion line, calculated as the average of the highest high and the lowest low over the last 9 periods. It provides a measure of short-term momentum. Currently, it’s below the Kijun-sen, reinforcing the bears.
- Kijun-sen (blue line): The base line, calculated over the last 26 periods, acts as a stronger level of support or resistance. It is above the Tenkan-sen, hinting at, yet again, bearish momentum.
- Chikou Span (green line): This lagging span is plotted 26 periods behind the current price. It’s intersecting the price action, which means there is a lack of strong momentum from both the bears and the bulls. Traders are being indecisive.
Bulls for the win
On-chain data shows that the bulls remain dominant, with a huge portion of the market either holding onto their positions in anticipation of higher prices or actively buying more.
Bears are present but less dominant, which indicates that while there is selling pressure, it hasn’t overwhelmed bullish sentiment yet. The difference between bulls and bears shows that the market is still more bullish than bearish.
There’s been a drop in the percentage of profitable addresses, which means that recent price movements have been unfavorable to many holders.
Tracking closely with the profitability curve, the declining price line might contribute to increasing market anxiety, influencing both trading strategies and liquidity.
All in all, Bitcoin bulls for the win!!!
Reporting and analysis by Jai Hamid
