Bitcoin Technical Analysis: BTC’s Subdued Start to the Week Amid US Market Closures

Monday is anticipated to be a subdued day for trading activities, owing to the observance of Martin Luther King Jr. Day, resulting in the closure of the U.S. bond market, Nasdaq, and the New York Stock Exchange (NYSE). Over the past hour, bitcoin has been observed trading within the range of $42,530 and $42,765 per unit, marking a slight decrease of 0.3% over the 24-hour timeframe. Bitcoin’s intraday prices have fluctuated, showcasing values from $41,746 to $43,005.

Bitcoin

A review of bitcoin’s daily chart reveals a distinct upward trend, marked by a sequence of increasing peaks and troughs since late November. This trajectory includes periodic retracements, manifested through a pattern of substantial surges and minor declines. The presence of strong trading volumes on days with significant price fluctuations reinforces the authenticity of these price changes, indicating that a positive market sentiment continues to prevail.

Oscillators currently display a predominantly neutral outlook, with the relative strength index (RSI) standing at 51 and the Stochastic at 65, both pointing to a market that is neither overbought nor oversold at present. Similarly, the commodity channel index (CCI) at -71 is situated in a neutral zone. These indicators collectively signal a market in balance, showing no significant leanings towards excessive bullish or bearish conditions, reflecting a state of equilibrium between buyers and sellers.

Bitcoin chart by TradingView

Delving into bitcoin’s 4-hour chart provides a more detailed perspective, uncovering increased variability within the overarching upward trend. This shorter timespan reveals less distinct trends, characterized by more lateral movements, hinting at a short-term complexity in the pricing trajectory. The recent decline from $49K to $41.5K around Jan. 11-12, 2024, marks a notable increase in selling activity or profit-taking, a pivotal observation for traders focusing on shorter durations.

Moving averages (MAs) across various periods present a more complex picture. While the exponential moving averages (EMAs) for 10, 20, 30, 50, 100, and 200 days show a mix of bearish and bullish signals, simple moving averages (SMAs) for the same periods mirror this mixed sentiment. The divergence between EMAs and SMAs at certain points, particularly in the 10 and 100-day periods, highlights the nuanced investor sentiment and the potential shifts in market momentum.

Bull Verdict:

The prevailing bullish signals on bitcoin’s daily chart, marked by consistent higher highs and higher lows, suggest a strong upward momentum. The mixed signals from oscillators and moving averages indicate a balanced market, but with a leaning towards further bullish activity. The resilience shown at established support levels coupled with substantial trading volume reinforces the potential for sustained upward movement.

Bear Verdict:

Despite the overall bullish trend observed in bitcoin’s daily chart, the complexities and fluctuations noted in the shorter 4-hour timeframe signal potential volatility and uncertainty. The neutral stance of oscillators like the RSI and CCI, coupled with the mixed signals from both EMAs and SMAs, highlight a market that could be poised for a downturn.

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