Bitcoin (BTC) declined significantly during the week of February 13-20 and broke above short- and long-term support levels.
BTC was rising since the week of January 24-31. The upward move initially looked like it would form a Morning Star candlestick, which is generally considered to be a bullish reversal pattern.
However, in the following weeks the trend reversed and BTC formed two bearish candles with long upper wicks (red sign). These effectively invalidate the possibility of a morning star pattern.
The price is now reaching a low of $32,917 on Jan 24.
Technical indicators on the weekly time frame are mixed but are trending bearish.
The MACD and RSI are both bearish and bearish. Bearishness is especially visible in the RSI, which has declined below 50. The RSI is a momentum indicator and readings below 50 are considered a sign of a weak trend.
On the bullish side, BTC broke below the lower Bollinger Bands on January 24. Divergence below the band (green icon) has reversed an earlier important bullish trend and vice versa.
BTC struggles for support
The daily chart also provides mixed readings but is still on a bearish side.
MACD and RSI are both declining. The decline in the latter is more notable as it has both broken above an ascending support line and dropped below the 50-line. As mentioned above, this is a development that is associated with a bearish trend.
On the bullish side, BTC broke a descending resistance line on February 4. This could mean that the current shortfall could just be a retracement in response to the breakout.
However, the downside momentum following the breakout failed to even reach the 0.382 Fibonacci retracement resistance level.
Moving on to the six-hour time frame, BTC has broken an ascending support line and is now attempting to find support.
There was a slight bounce back from the 0.618 Fibonacci retracement support level at $37,860. It is both a horizontal and fib support level.
The next support level is $36,200, which is formed by a horizontal support area.
short term movement
Finally, the two-hour chart shows that the ratio of 1:1.61 has been formed in two downward movements so far. Therefore, it is possible that the pattern is completed and a reversal will follow.
If a reversal occurs, the $39,600 and $40,600 levels will be expected to act as resistance.
However, as it stands, there are no signs of a long-term bullish reversal. Therefore, it looks like BTC will be rejected again at these levels.
For previous bitcoin (BTC) analysis from BeInCrypto, click here