Bitcoin Price Weekly Analysis: Cautiously Bullish BTC, $3,900 Presents Resistance
Bitcoin price corrected lower sharply after trading towards the $4,200 resistance against the US Dollar.
The price declined below the $3,860 support area and tested the $3,620 support zone.
There is a short term ascending channel or bear flag formed with resistance at $3,900 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
The pair could slowly move higher as long as it is above the $3,760 and $3,720 supports.
Bitcoin price started consolidating losses below $3,860 against the US Dollar. BTC/USD could rise again as long as there is no daily close below the $3,720 support level in the near term.
Bitcoin Price Analysis
After a sharp rally above the $4,000 level, bitcoin price faced sellers near the $4,190-4,200 zone against the US Dollar. The BTC/USD pair declined heavily and broke the $4,000 and $3,860 support levels. There was a close below the $3,860 support and the price spiked below the $3,650 support level. It traded close to the $3,620 support level and recovered later. More importantly, there was no close below the $3,720 support and the 100 simple moving average (4-hours).
The last swing low was formed at $3,628 and the price climbed above $3,760. It broke the 23.6% Fib retracement level of the last decline from the $4,191 high to $3,628 low. There was a proper close above the $3,760 level and the 100 simple moving average (4-hours). However, the price struggled to break the key $3,860 resistance (the previous main support). At the outset, there is a short term ascending channel or bear flag formed with resistance at $3,900 on the 4-hours chart of the BTC/USD pair.
The pair could slowly move higher towards the channel resistance and $3,890. The 50% Fib retracement level of the last decline from the $4,191 high to $3,628 low is also near the channel resistance. Therefore, it won’t be easy for buyers to clear the $3,900-3,910 resistance area. If there is a proper close above $3,900, the price may rally towards the $4,000 barrier. On the downside, an initial support is at $3,760 and 100 simple moving average (4-hours). If there is a daily close below the $3,720 support, the price could move into a bearish zone towards $3,620 and $3,560.
Looking at the chart, BTC price seems to be consolidating below the key $3,860 and $3,900 resistance. Until the price is below $3,900, there is a risk of another drop. Therefore, buyers seem to be cautiously bullish, but it might change if the price closes below $3,720.
4 hours MACD – The MACD for BTC/USD is slightly in the bullish zone.
4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is currently flat near the 50 level.
Major Support Level – $3,720
Major Resistance Level – $3,900
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