Bitcoin is supported as it prepares for its next move

Bitcoin fluctuations (BTC / USD) have declined significantly over the past six weeks as the pair has been restricted to a major price suppor...

Bitcoin fluctuations (BTC / USD) have declined significantly over the past six weeks as the pair has been restricted to a major price support area. Low volatility usually leads to more volatility, and given the price pattern, Bitcoin is ready to move soon.

For the past six weeks or so, Bitcoin has been supporting a downtrend channel. This follows the completion of the 61.8% Fibonacci correction in the 2019 rally, as seven weeks ago the pair fell to $ 7,231.40 and held at $ 6,430 before reaching. This is the lowest level of 53.6% in the highest level of 2019 and is still in the lowest recent trend.

The six-week moving average is above $ 7,870.10, which is almost below the orange line of the 55-week moving average (EMA) and is currently at $ 7,805.60. In addition, the long-term uptrend has supported the lowest level so far. Although the formation may not take place, so far this pattern can be used as a reverse pattern of the bottom two trend.

Although it is not clear what will happen next, it seems that Bitcoin is moving in one direction or another.

The first sign of an uptrend break is the advance above the latest daily short-term swing, which is $ 7,689 from two weeks ago, confirming strength in a decisive move above $ 7,870.10. Note that the 55-day moving average is shown in the chart below, and also shows the resistance to the current consolidation along with a trend line. Also, there is an upward divergence in the 14-day relative resistance index (RSI).

Even with a 53.1% improvement, Bitcoin ended with a growth of 94.1% in 2019. In an uptrend scenario, not only is it possible to reach the top channel line, but Bitcoin has the opportunity to break out of the downtrend channel. The fall channel is part of the potential pattern of the continuation of the bull flag trend, which is formed after the highest level of $ 13,868.44 in 2019. The climb ended with 283.2% 28-week offensive advance towards the lowest level of the bear market in December 2018, ie $ 3,128.89, and could be the first climb to the bottom. As a result, similar buyer enthusiasm can be seen as soon as the second ascent continues, which is first shown in the break of the bull flag.

In the downtrend, a sharp drop below $ 6,430 will continue the downtrend channel, and sell pressure could be accelerated as the breakdown occurs below the long-term uptrend line. With support at the previous support level of around $ 5900 and 78.6% Fibonacci correction at $ 5427.15, the low key support area is known as $ 5900 to $ 5427.