- The price made a double top at $4200 and retraced.
- It made three unsuccessful attempts to break above the 7-day moving average.
- Price broke down through the minor $3600 support area which now acts as resistance.
The price is trading in a short-term descending wedge, a breakout from which would put into play the resistance areas at $3600, $3900 and the previous top at $4200.
Short-Term Outlook – BTC/USD 6Hr Chart
6 hrs Chart, bitfinex
Finally, a look at the 6-Hour chart gives us two possible trading structures for the price of Bitcoin. We can see that after reaching the $4300-$4400 resistance area, price initiated a retracement. Price is trading in a possible descending wedge, with the solid green line acting as support. For the resistance, there are two possible lines which have not been validated yet. In the first scenario (purple dashed line), we have broken out of the descending wedge and are close to the $3600-$3700 resistance area. I believe this to be less likely since the breakout was done on minuscule volume. The second scenario (red dashed line) we are still trading in a descending wedge which ends on February 11.
Medium-Term Outlook – BTC/USD 3 Days Chart
Chart Source Tradingview 3 Days, Bitfinex
A look at the 3-Day chart gives more information about price movements. Preceding the recent upward move the price developed bullish divergence in the RSI. Price is currently trading below the 7, 21, 50, 200 period MAs and the Ichimoku cloud, while facing very close resistance from the 7-period MA.
However, the MACD has made a bullish cross and is heading upward, albeit with decreasing strength.
Chart Source Tradingview daily Bitfinex
A look at the Daily chart shows that price has retraced to the 0.786 fib line of the whole upward move ($3273 to 4175).