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Bitcoin price weekly analysis – 20.1.2019

Bitcoin price has been moving sideways during most of last week, ranging between $3,600 and $3,800 throughout most of last week’s trading sessions. The week started by bitcoin price rising to record a week high of $3,800 on Monday. After the week high was recorded, bitcoin price started dropping down to record a week low of $3,606 on Thursday. Thereafter, bitcoin price started moving sideways ranging between $3,600 and $3,700 during the rest of the week’s trading sessions.

Bitcoin price and the news:

Last Wednesday, Bitwage reported that it has partnered with Simply Efficient HR, a payroll company headquartered in Texas, to enable more US firms to pay their employees in bitcoin or ether. This new partnership is expected to expand Bitwage’s current user-base which exceeds 20,000.

A local news service in Chile reported last Thursday that Chileans will be able to pay their taxes in cryptocurrency starting from next April. This comes after the Chilean government had included cryptocurrency based assets in its books, and created a special form specifically for this purpose.

Last Friday, Ethereum’s core developers decided to postpone activating the Constantinople hard fork to some time between February 26th and February 28th. This decision came following detection of a security vulnerability last Tuesday by ChainSecurity, a smart contract audit firm, in an Ethereum Improvement Proposal (EIP) which is planned to be included in the Constantinople hard fork in order to modify the costs of data storage on Ethereum’s blockchain.

New resistance forming around $3,800 on the 4 hour BTCUSD chart:

Let’s examine the 4 hour BTCUSD chart from Bitfinex, while plotting the Bollinger Bands, the William Alligator’s SMAs, and the MACD indicator, as shown on the below chart. We will also keep the Fibonacci retracements we plotted in our previous bitcoin price analysis which extends between a low of $3,215.2 and a high of $7,788. We can note the following:

BTC 20.1.1.PNG

– Bitcoin price rose in the beginning of the week to record a high of $3,800 on Monday. The upwards momentum was resisted by the upper Bollinger band, as shown on the above chart. A new resistance level around $3,800 is now evident, as shown by the bearish engulfing candlestick pattern forming after the week high had been recorded. The bearish engulfing pattern and formation of two candlesticks near the upper Bollinger band prove that this price level had resisted further price rise. This can also be evidenced by the relatively long upper shadows of candlesticks near this price level.

– After the week high was recorded, bitcoin price began dropping until a week low of $3,606 was recorded on Thursday. Bitcoin price was supported by the lower Bollinger band, as shown on the above chart. A new support level around $3,600 is now evident, as shown by the doji that formed as price dropped near the level of the lower Bollinger band. The strength of this support level is also evident by the relatively long downwards shadow of the doji candlestick.

– The Williams Alligator’s SMAs are exhibiting a bearish alignment, as the red SMA (teeth) is between the blue SMA (jaw) from above, and the green SMA (teeth) from above.

– The MACD is exhibiting a bullish alignment, as the blue MACD line is above the red signal line. However, its value is in the negative territory, so the MACD is somehow equivocal and cannot predict price movements during the upcoming few days.

Green Ichimoku cloud on the 1 day BTCUSD chart:

Now, let’s examine the 1 day BTCUSD chart from Bitfinex, while plotting the Ichimoku Cloud and keeping our Fibonacci retracements, as shown on the below chart. We can note the following:

BTC 20.1.2.PNG

– The resistance around $3,800 is also evident on the 1 day chart, as shown by the bearish “piercing” candlestick pattern forming after the week high had been recorded.

– The Ichimoku cloud is still green in color, which denotes that bitcoin price will mostly rise during the upcoming 2-3 weeks. However, the conversion line (blue) has crossed below the base line (red), which is a bearish signal. Candlesticks are below the base line, which is another bearish signal. As such, bitcoin price will mostly drop during the upcoming week.

Conclusion:

Bitcoin price has been more or less stable during most of last week’s trading sessions, with low volatility levels. Our technical analysis denotes that bitcoin price will mostly drop during the upcoming week, yet the $3,600 price level will mostly support the market and prevent further drop. On the upside, the $3,800 price level seems to be a strong resistance level that will prevent advancements of the market’s bulls.

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