Interday technical analysis of BTC-KRW
The four-hour chart of bitcoin against the won (BTC-KRW) clearly shows bitcoin’s large gains since the end of last week. BTC moved up comparatively steadily to reach two-month highs above ₩9,200,000 on Tuesday morning GMT but has now retraced somewhat from this area.
This means that the area of ₩9.28 million is probably the most important resistance on this timeframe. Low support here is the area of ₩7.45 million which was last tested on 18 December 2019. A bounce seems to be likely if price reaches either of these areas again in the near future. However, there is a number of important and possibly important supports significantly above ₩7.45 million which can be found with reference to technical indicators.
Technical indicators on BTC-KRW H4
The typical combination of 50, 100 and 200-period simple moving averages gives a buy signal here; however, it is still weak. The 50 SMA (from Bollinger Bands) has only just moved above the slower two lines within the last three periods. Conversely, price itself has moved very significantly above all three of these MAs. It’s possible that support could be found from the three moving averages around the area of ₩8.52 million.
Bollinger Bands (50, 0, 2) give us more information. The most important signal from Bands at the moment is overbought: price moved completely outside the upper deviation for a full three periods today. While the current period might result in a close within the upper line of Bands, this would nonetheless be a poor area to buy. One can also observe the significant widening of Bands’ two deviations so far this week. The contraction of the upper and lower lines around the end of last year appeared to set the stage for a breakout: this initial phase of this has already occurred.
The likelihood of continuation sooner or later seems to be quite high based on other indicators. MACD (12, 27, 9)’s histogram has extended noticeably beyond the signal line. The average directional index also reads over 40, with the positive index also giving a figure more than 20 higher than the negative. In general, technical indicators here signal that bitcoin looks likely to continue its gains after a period of consolidation and retreat from overbought.
Price action and Fibonacci
Price action since the end of last week was fairly consistent with a textbook breakout in crypto markets. The upward rejection on the morning of 3 Jan GMT was followed by two large up periods and a short consolidation. This pattern has repeated itself. Particular attention should be paid to the upward engulfing candle early yesterday morning. While it’s possible that such a pattern might reoccur within the next couple of days, price’s presence outside Bands at the time of writing makes a slightly more extended consolidation likely if this is to be considered the start of a healthy trend.
The key Fibonacci retracement area here is 23.6%. Assuming there is no major change to the tone of recent price action, many buyers will be looking to enter there. A number of others might prefer to wait for the 38.2% retracement, not least because this line overlaps with the last completed consolidation around ₩8.78 million. The 61.8% Fibo in the same area as all three simple moving averages suggests that ₩8.52 million might be a key support.
Technical analysis of BTC-KRW: summary
The general picture on the four-hour chart of bitcoin-won is positive. Indicators suggest that this could be the start of a new uptrend. However, it is generally not recommended for traders to buy in when price is above the upper deviation of Bollinger Bands; this applies to crypto as well as forex. Otherwise, the key area to the downside seems to be ₩8.52 million: if there’s a four-hour close below this, it’s possible that the bears might regain control.
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