The price dipped to $38,000 (as we had carefully highlighted in the Day Trading View paragraphs of this Bitcoin Price Analysis) and it manages to have a minor revival this morning, around $38,800.
The breakout point in this situation continues to be around $40,000, as it serves as the turning point between any bearish thoughts (following a direction towards $35,000 or lower) or any bullish thoughts (touching the $44,000 point again and breaking it). As the market consolidates around $40,000, the market will continue to stand at a waiting position.
This waiting position shows that the market has entered a stable phase regarding its fundamental elements. This also means that we should dig up to use the “fair price” theory. The “fair price” theory indicates that the market has decided for a certain period that an asset’s price has been valued fairly from the market and this is not going to change easily.
This approach is using mostly fundamental analysis elements while news and stories are playing a minor role in price formation. At this moment, the estimated “fair price” could be around $40,000, so any move on the upper or the lower level would be mean-reverting towards this point.
If the theory confirms its existence, at least for the short-term period, there is a need for something big to happen to get off the current price rails. Similar examples in the past have been Tesla’s decision to invest $1.5 billion in Bitcoin, which took Bitcoin’s price from $47,000 to $60,000 in some days.
Another example was the institutional investors’ entrance into the Bitcoin market, right after the $30,000 point breakout. This move gave Bitcoin the power to climb rapidly from $30,000 to $40,000 in some weeks, without major resistance in the price formation process.
In today’s Bitcoin Price Analysis the trading volumes have not shown extended exposure in the market dynamics so we have to wait for another trend to come up. The moving averages have been at bearish positioning, for now, showing that the market will come up with different indications about the next trend and how it will evolve.
The roller coaster scheme is much more evident in the short-term overview as the price goes up and down constantly, without having a clear path towards a bullish or a bearish direction.
Another pattern that could emerge from the short-term view is the triangle, formed with a bottom line at $38,000. The two other contact points for the triangle were at $44,000 and $42,000 respectively.
This pattern usually leads to a bullish breakout as the consolidation phase around $38,000, enables the market to move with great power towards a bullish reaction.
MACD index (Moving Average Convergence Divergence) continues to stay on the “red” side, showing that there is a total lack of momentum in the market. This fact could delay any potential positive development in the short-term future and create a negative factor for any positive development.
The RSI index (Relative Strength Index) moved between values 45 and 50, showing that the market will remain on the same spot. This stability has been influenced by a negative trend over the next price moves. Those moves could end up in a solid trend in a negative way but we are expecting a less surprising reaction.
The bearish signal that came up on Friday morning was eventually confirmed after the weekend, in the last hours of Sunday. This means that the weekend could be excluded from major analysis as it delays several periods for what can happen in the Bitcoin market.
During the weekend, there was a possibility for a bullish signal as the two moving averages came close to each other but this didn’t happen hopefully. The expectations for another bullish signal in the market structure will be fulfilled once there is more consolidation at the points, below the $39,000 line.
The expectations will be fully exploited during the week. If a bullish signal came up, we could expect a return upon $40,000 in the next few days. This should be accompanied by other indications and signals from the paragraphs below.
As you can see in this Bitcoin Price Analysis MACD index was coordinated with the moving averages, without producing any bullish signal from the weekend. This means that the market momentum in the 4 hours period made some critical moves that could spark another signal in the short-term position.
On the other hand, the RSI index is moving constantly around value = 50, showing that the market will not move from the current trend and will not make any sharp moves from this point and on.
As we have highlighted several times in the day trading section, there is an important cross indication between signals and indicators that will lead any trader to take a position in favor or against any price movement.
Bitcoin has passed a calm weekend after having another correction in the market development. The price remained below $40,000, indicating that the market will be pushed to test again this line if there are any positive developments over the next few days.
The ranging period has not ended for now and the expectations from investors are laid on another testing at $44,000 resistance point. This will become more evident in the next bullish action, which could probably be the decisive one.
Read our previous Bitcoin Price Analysises here!
Don’t worry, we hate spam too
one weekly digest, just the important stuff.