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Bitcoin’s 3 Most Difficult Challenges: The Monthly Downtrend, The Weekly And The Daily

The price charts don’t care if Bitcoin is an asset or a currency or even some mutant combination of the 2. All the price charts show is whether an investment is going up or down in value and where the possible support and resistance levels might be found.

From this technical analysis perspective, you can leave alone arguments, theories or any kind of deep thoughts about the future uses of cryptocurrencies and quickly focus on what matters to most investors.

Here’s how the daily chart looks for Bitcoin right now:

Bitcoin daily price

You can see that the downtrend, in place since March of this year, remains in effect. The price continues to stay below the Ichimoku cloud and the overall direction is basically unchanged. After breaking below the 6000 support level and dropping all the way down to 3000, Bitcoin has managed to bounce back up toward 4000.

You can begin to make out a positive divergence for the first time on the relative strength indicator (RSI) above the chart. Whether this could be the basis for a start to a more significant rally remains to be seen.

Here is the weekly price chart:

Bitcoin weekly price

It’s clear how, in November, the price dropped below the longer-term weekly uptrend line and has remained below it. You can see that Bitcoin is staying well below the weekly Ichimoku cloud as well. If a rally boosts the price over the next few weeks. the cryptocurrency is likely to run into serious resistance as that 6000 level — the previous support area.

The fierce selling that took it below that spot may be tough to overcome. Note that neither the relative strength indicator (above the chart) and the moving average convergence/divergence indicator (below it) have yet to provide any kind of positive divergence signals on this weekly chart.

Here’s Bitcoin’s monthly price chart:

Bitcoin monthly price

The most significant bit of information gained from analyzing this month by month price movement is that the price has dropped below the very long-term uptrend line going all the way back to 2015. Those 5 straight red monthly bars show how steady and relentless has been the unloading of Bitcoin — you won’t be able to find another spot on the chart with 5 red bars in a row.

The other item of interest is the moving average convergence/divergence indicator (below the chart) which shows the summertime, 2018 sell signal that seems to have provided a distant early warning of some kind.

No one can predict the future course of the price of Bitcoin. What can be said, however, is that it may be tough going as long as clear downtrends remain in place on all 3 time frames, which is what these charts clearly show.

I do not hold positions in these investments. No recommendations are made one way or the other.  If you’re an investor, you’d want to look much deeper into each of these situations. You can lose money trading or investing in stocks and other instruments. Always do your own independent research, due diligence and seek professional advice from a licensed investment advisor.

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