Bitcoin Weekly Analysis - 31st August

Bitcoin is opening its 5th week in a row above $11,000 USD, a record since January 2018.

In this article, we will be reviewing Bitcoin from a Technical Analysis point of view and try to make a strategic plan for any move BTC will do.


We will try to keep those analyses simple and easily accessible but do not hesitate to ask us any question over our Telegram if a point is not clear enough for you.

Bitcoin Weekly Chart Analysis

Bitcoin Weekly Chart on TradingView

The tools used for this analysis are the following:

  • Support and Resistance Levels
  • VPVR
  • RSI
  • MACD

You can learn more about how to use those indicators in this Guide.

Bitcoin has been consolidating for 4 weeks above $11,000 USDT. The first horizontal level we will be watching is the $11,500 level. As you can see, this level has been an important area of Support/Resistant in the past. All the candles closing below have been bearish (Mars 2018 and July/August 2019). With not much rejection, we closed above it 4 weeks ago and are now consolidating above. This is bullish for Bitcoin.

Red horizontal levels ($13,380 & $13,970) are areas of possible resistance/profit targets.

Volume Profile Visible Range, aka VPVR, is displayed on the chart with the right-sided histogram. High Volume Nodes, aka HVN, tends to be Support & Resistance Levels. The length of those bars corresponds to the volume traded in the matching price level.

We can notice that below $10,000, Bitcoin has seen a high volume, much more than in the upper levels. 

The support level, colored in green, is matching the HVN level. This support has been drawn by capturing all the wick to the downside when this zone was behaving like a Resistance.

If the $11,500 support level comes to breaking down, we could use the Green Level to buy back BTC.

Considering the RSI and MACD, they are not much relevant for this analysis, but I like to display them as they could show signs of weakness, but this is not the case on this chart.

RSI is still standing above 50 which is a strong sign and MACD is still positive.

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Bitcoin Daily Chart Analysis

Bitcoin Daily Chart Analysis
Bitcoin Daily Chart on TradingView

The tools used for this analysis are the following:

  • Support and Resistance Levels
  • EMA 200
  • RSI and divergences
  • MACD

The Daily Chart is not much different from the Weekly Chart. It shows a consolidation after a bullish move. 

Consolidating after a move gives up more chances to continue that move.

 

We can find our green support area which is probably going to act like a support if BTC pulls back from here.

You can notice a small horizontal line at $11,070 that is showing a possible Double Bottom.

Take a look at that diagonal trendline. It has been working as a Support & Resistance Flip during the uptrend. Going back to the horizontal support & this trendline would be a good area to buying some BTC.

This diagonal trendline has been broken at the same time as the EMA200. We can also consider the EMA200 as a support indicator.

 

Considering the RSI, we have been able to monitor (and trade in our Telegram group) the Confirmed Bearish Divergence. The RSI is now sitting a bit above 50 but is trending down.

The MACD has turned negative and is showing some weaknesses.

 

My prediction for BTC is that we will continue to consolidate above the green area for a while and continue the move up, as indicated with the white sketch on the chart.

Bitcoin H4 Chart Analysis

Bitcoin H4 Chart Analysis
Bitcoin H4 Chart on TradingView

For this analysis, we will only be using Price Action.

You can learn more about Price Action in this Guide.

 

The first thing we can notice is the range of Lows / Highs. This is quite a trap here since we can see a deviation over this range.

The Range Highs are in the $12,000 area, while the Range Lows are in the $11,100 area. After the move up, this is where the price has mostly been trading and consolidating.

A clear Break-out of this range would give us the most likely direction of the price.

 

You can notice that close to those Range Lows/Highs, we have peaks of Volume. Those are helping us to confirm our Analysis. Peaks above these previous confirmations will be used to validate breakouts or bounces.

 

Inside our current range, we can monitor a diagonal resistance trendline, touched 3 times already. This trendline has been pushing down the price for the last 11 days. We can expect the price to continue moving down until touching back the Range Lows and then form a Descending Triangle.

A breakout of this pattern with a volume confirmation would be a nice opportunity for a Swing Trade.

 

PS: On this chart, the analysis was done without using RSI & MACD to give a little air to the chart. They were not really relevant, but I still use them in lower timeframes.

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Market Sentiment Analysis

Market Sentiment Analysis Open Interest
Open Interest Study over the past week on BTCtools

The Open Interest is not moving while the price is consolidating after a move up. This can be interpreted in different ways:

  • People are not fully taking profits from their Long positions 
  • People are scared to open Long and Short positions at this price.
Fear & Greed Index

Still on BTCtools, we can observe the Fear & Greed Index which shows no signs of Extreme Greed or Extreme Fear yet.

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