technical analysis BTCUSD

Technical analysis of BTCUSD

Bitcoin has made very strong gains this month with demand remaining high and shares’ performance generally lacklustre. Record loose monetary policy and reconfiguration of many DeFi investors’ portfolios somewhat back to bitcoin have spurred the leading cryptocurrency upward. Today’s technical analysis of BTCUSD looks at the daily chart plus transferable volume and futures.

Yesterday’s high of around $13,810, the highest price in 2020 so far, coincides with late June 2019’s peak and so is likely to be a strong resistance. The clear low support here is the psychological area around $10,000.

Technical indicators on BTCUSD H4

 

Moving averages continue to give a strong buy signal, with all of the 50, 100 and 200 SMAs successively above slower lines and below the price although the 50 is barely above the 100. The latter two are in the process of completing a golden cross. The 100 SMA is probably the strongest support from moving averages.

Both Bollinger Bands (50, 0, 2) and the slow stochastic (15, 5, 5) have displayed clear overbought signals for several days. However, price has now moved back slightly inside the upper Band. The stochastic at 84 is in the process of crossing over downward within the zone of buying saturation.

Price action and Fibonacci

 

The breakout from September’s triangle has now clearly been confirmed with the price surging past the upper starting point of the pattern on 21 October. Since then there have been no clear patterns, whether traditional or of candlesticks. Relatively long tails since 22 October might suggest lower momentum to come, which makes sense in the context of an annual high having been reached.

Price bounced from the 61.8% daily Fibonacci retracement area and has now moved past 0%, so the next target based on this would be the 61.8% extension, significantly above the top of this chart. Movement back inside the weekly Fibonacci fan is also significant for suggesting persistent long-term momentum although a lull over the next few days remains likely.

Transferable volume

 

technical analysis BTCUSD

This 30-day chart of transferable volume for bitcoin basically confirms the positive impression from TA. We can see the very high volume of over $1 billion last week as bitcoin broke out of its triangle to the upside, but volume has remained high this week also. The key question is how any subsequent test of 2019 and 2020’s high around $13,000 might play out.

Futures on bitcoin

 

Volume for monthly futures on bitcoin is also high, and this chart reflects that of the spot CFD fairly closely. December’s contract being mildly pricier than next month’s would typically suggest ongoing gains.

Technical analysis of BTCUSD: summary

 

The technical picture for bitcoin is overall very strong and seems to suggest continuation upward sooner or later. However, there are two critically important factors to be monitored over the next few days of trading:

  1. How price interacts with the key resistance around $13,000, the high of both 2019 and 2020 so far
  2. Possible changes in sentiment around the initial results of the American presidential election, particularly if a clear result is available unexpectedly quickly

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