Bitcoin Price: Bear Market Isn’t Over Yet, But $7.6K May Change This
Fresh off the strong bounce on Wednesday, Bitcoin price is trying to hold on to $7,200 support and stage a move up to the next key level of resistance.
As we move into the weekend, the majority of cryptocurrencies are also trading higher. Nevertheless, Ether (ETH) is still struggling to regain $130 while XRP has been unable to reclaim $0.20 after the rejection on Wednesday.
Bitcoin dominance inches higher
This is highlighted in Bitcoin dominance, which is now at 68% and continues to threaten to take the 70% level, which continues to look like a possibility as Ethereum continues to lose market cap share.
Cryptocurrency market daily view. Source: Coin360
Bitcoin is currently ranging between long term weekly resistance of $7,600 and the mid $6,000s.
The 15% swing off the lows on Wednesday engulfed prior days of trading but failed to break through the declining resistance, which has defined the month of December.
Currently, the BTC price is finding support in the middle of this trading range above $7,000. The key moving averages (MA) of the 50, 100 and 200-day are all above price and trending down, illustrating that the overall trend remains to the downside on the daily chart.
BTC USD Weekly chart. Source: TradingView
The daily volume shows that the most recent high-volume candles coincide with the bullish response in the $6,000s, which goes some way in indicating that this is an area of demand.
Bullish divs for OBV and MACD
The On-Balance Volume indicator, or OBV, continues to maintain a long-term bullish divergence with price. The moving average convergence divergence indicator, or MACD, remains below zero which is bearish. However, this indicator is trending up alongside a bullish divergence on the MACD.
BTC USD Daily chart. Source: TradingView
The daily chart is showing that the bounce off the 7-month low on Wednesday suggests buying interest at the mid $6K level, which is reflected in the volume led indicators and also highlighted by a shift in momentum.
Despite this, Bitcoin needs to overcome declining resistances and the $7,600 weekly resistance level to demonstrate a shift in trend.
The 4-hour chart highlights the declining overhead resistance and the importance of the low $7,000 level.
At present, Bitcoin is trading above the point of control in which most volume has been traded; $7,115 is also the weekly open, which is an important level for Bitcoin to close above.
Moving into the weekend, the bulls will need to maintain this level for the weekly close.
BTC USD 4-hour chart. Source: TradingView
The 4-hour MACD shows that the bulls are attempting to capitalize on the support that has been found so far above $7,000. Volume is starting to trend higher and the most significant large volume candles are green, suggesting a general trend change.
The 4-hour MACD is above zero and crossed bullish, though now printing lower highs on the histogram, which indicates a loss of momentum. The RSI is well above 50 and attempting to push higher.
Overall, the 4-hour chart suggests that the bulls are looking to defend the weekly open and finish the week with a green candle.
BTC USD 4-hour chart. Source: TradingView
The one-hour Bitcoin chart is showing that the bulls continue to test $7,200. But overall, the price remains in a consolidation period following the large buying volume on Wednesday.
But while the volume remains low, the MACD is beginning to reset and cross bullish above zero, which may hint at the bulls having a push into the Friday close.
The RSI is also now trending higher above 50 — another positive sign.
BTC USD 1-hour chart. Source: TradingView
Despite the apparent shift in volume and momentum dynamics off the demand in the $6,000s, Bitcoin remains in an overwhelming multi-month downtrend, which is also visible on lower timeframes.
In order to be reasonably bullish in this market, Bitcoin needs to begin closing and finding support above key resistances, in particular, that of $7,600 on the weekly.
A higher-high over $8,000 and key moving averages trending higher would also be indicative of a more fundamental change in market direction, which remains locked in a bear market.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
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