Since reaching a bottom of $3,782 on March 13, the BTC price has been increasing. The increase has taken the from of an ascending wedge, which is considered a bearish reversal pattern.
Since reaching the aforementioned bottom, the BTC price has increased by almost 90%. However, the increase still pales into comparison with the previous downward move, as was outlined by cryptocurrency trader and analyst @Walter_Wyckoff.
He outlined a BTC chart that puts the current upward move in perspective relative to the previous decrease and drew numerous resistance levels that he will look to short if the price gets there. While he has outlined the main resistance level at $7,600, he believes that a very long upper wick could take us to prices as high as $8,100-$8,300.
Technically short are would be 7.6k, but this is $BTC, so I would not be shocked by some scam wyck reaching 8.1/8.3 k. Blind shorts there, alert at 7.6k, will short the breakdown if my blind asks don’t get filled. The pattern is very corrective till now, textbook corrective pic.twitter.com/hwNgJHm647
— Walter Wyckoff (@walter_wyckoff) April 6, 2020
Is the Bitcoin price still retracing, or has it begun a new upward move? Will it be successful in reaching $7,600? Continue reading below if you are interested in finding out.
While the current daily candlestick is bullish engulfing, there is considerable resistance right above the current price level.
First, the price has yet to move above the resistance by the previous long upper wick on April 2, which also coincides with the 0.618 Fib level of the entire downward move.
Next, if the price is successful in reclaiming this level, there is strong resistance at $7,600, as outlined in the tweet. This area has previously acted as resistance and support intermittently and coincides with the 50-day moving average (MA).
The next resistance level is found at $8,200, coinciding with the 200-day MA. The 50- and 200-day MAs have already made a bearish cross. Therefore, even if the BTC price were to move above the current resistance level, the potential for further increases seems limited due to numerous resistance levels above the current one.
Since reaching a low on March 13, the BTC price has likely been trading inside an ascending wedge. It is approaching the end of the pattern, which is projected to be on April 9 at the latest.
Volume has been decreasing throughout the pattern, which is common in descending wedges. The volume is extremely small in the current candlestick, even though that is a bullish engulfing one. This is a bearish sign that suggests a lack of buying power.
The resistance line of the wedge also coincides with the confluence of resistance levels discussed previously. This suggests that the price is likely to eventually break down from the wedge and head toward the $5,900 support.
To conclude, the BTC price is trading inside an ascending wedge, from which it is expected to break down. Even if the price continues to move upward, the potential for increases is limited due to several resistance levels right above the current price. On the other hand, there is virtually no support all the way to $6,000.
The post Bitcoin Moves Above $7,000, Targets Key Resistance Level appeared first on BeInCrypto.