24.10.2020

Bitcoin Price Pushes to Clear $7,750 as Key Weekly Close Approaches

Altcoins also rallied higher as Bitcoin price squeezed up to $7,700 earlier today but at the moment top movers like Ether (ETH), Chainlink (LINK) and Tezos (XTZ) are dependent on Bitcoin’s price action in order to continue their uptrends. 

Today Bitcoin (BTC) price briefly popped above $7,700, suggesting the reminder of the weekend, along with the weekly close will provide higher than normal levels of excitement. The move to $7,708 was short lived but nearly set a higher high above Thursday’s impressive surge to $7,742. At the time of writing, Bitcoin price is trading sideways between $7,500-$7,569 as traders attempt to press the price above $7,600.

As shown on the 4-hour chart, Bitcoin price is pinned below $7,600 and this level also lines up with the March 12 drop candle which initiated the steep drop to $3,765. We can also see above this is the tweezer top Bitcoin price formed at $7,980 on March 11-12.

As discussed in previous analysis, this is just a hair away from the 61.8% Fibonacci retracement and today and on April 23 the price struggles to cross above this level of resistance.

BTC USDT 4-hour chart
BTC USDT 4-hour chart. 

As the price consolidates in the current range, it’s important that Bitcoin holds above $7,475 (bottom red line) or the price is prone to drop to retest the underlying support levels.

Already the MACD has dropped below the signal line on the 4-hour timeframe and the MACD histogram has turned negative. The RSI has also come down from bullish territory and current is at 62.5.

BTC USDT 4-hour chart
BTC USDT 4-hour chart. 

Traders will also note that the price has rode along the upper Bollinger Band arm since April 23 when the digital asset surged to $7,752. Usually after a breakout the price eventually drifts down to touch underlying support. In this case that would be the 20-MA of the Bollinger Band moving average, which is slightly below the high volume VPVR node and 50% Fib level at $7,130.

Failure to hold $7,475 increases the likelihood the price will drop to $7,130.

BTC USDT daily chart
BTC USDT daily chart.

The daily time frame shows Bitcoin price in relatively good order as the asset has put some distance between itself and the previous 19-day resistance zone from $7,250 to $6,900 but as mentioned earlier, a retest of $7,250 to $7,100 is not an extraordinary expectation.

The most recent two candlesticks show the price is in flux as the neutral doji candles show buyers and sellers are in contention over the direction of the trend. Typically volume precedes price and on the daily timeframe we can see that buy volume is beginning to build up and the pattern of daily higher lows remains intact.

If the price can make a higher high above $7,750 an attack on the 61.8 Fib level ($7,924) seems likely. Above the 61.8 level there is also a volume gap on the VPVR, suggesting a high volume breakout could push the price above the 100 and 200-day moving average to $8,700.

As the weekly close approaches traders will be keeping a sharp eye on either buying a breakout above $7,700 and $8,000 or looking to buy the possible dip to $7,150. In a recently published analysis, Cointelegraph contributor Micheal van de Poppe said a bullish scenario for Bitcoin would likely entail:

“A breakthrough of the $7,700 area would likely warrant further upwards momentum with targets of $8,500 and $9,000 (as that’s also the CME gap).”

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