Bitcoin price analysis: Why does nothing happen with the bitcoin price?
This week we have a very quiet period behind us. Bitcoin has moved this week mainly within a zone of about 100 euros. These are small movements for this crypto coin. Yesterday we came to the conclusion that bitcoin is more stable this month than the stock market.
Bitcoin is trapped
Silence may well be golden, but what does it mean for the forthcoming week? It seems that the price is trapped within a channel. When such a channel formation occurs, the price continues to move between the same bottom and top. This makes it seem as if the bitcoin exchange is barely moving. That channel in which bitcoin is moving insinuates a rising movement.
Usually a price momentum builds up when it moves within a channel. Will there be an outbreak? This is usually accompanied by a great deal of violence. We saw that on the 10th and 11th October when bitcoin broke out of a channel.
Now that the price is again in a strong channel, there is a chance that we will soon see a strong outbreak. In our scenarios we will let you know where such an outbreak could end. But before we do that, we look at the indicators to see what they tell us.
What do the indicators say?
As usual, we look at our favorite indicators to determine what the price is going to do. Certain indicators tell us a lot, but offers no guarantee whatsoever. After all, the price is mainly determined by fundamental factors such as news.
First we’ll take a glance at the MACD indicator. We use this TA tool to see how powerful a particular trend is. If we decide to take notice to the current MACD then the picture is a rosy one. The price moves slowly upwards and according to the indicator that is a powerful movement.
Perhaps we can take a look at one of our other favourite indicators- the RSI. The RSI shows a very different picture indeed. This indicator shows whether a coin is overbought or oversold. At the moment it is not very clear how the price is according to this indicator. Everything above 50 counts as bullish on the RSI and at the moment the indicator is 55. The price is therefore in the safe zone. According to this indicator, it will take some time before we see a solid movement.
Like every week, we outline two scenarios that explain what the bitcoin price could do. What will it be? Do we forage deep into the green figures again or do we plummet into the red? These are our scenarios for the bitcoin price for next week:
The price is nice and quiet the past few days. The outbreak that follows could lead to ugly red numbers. Will the price fall below the channel shown above? Then the first strong support lies at 5,450 euros. The support would then proceed to drop by € 100 to € 5,350.
One of the indicators clearly hinted at a positive outbreak over the channel that we have spotted. Will the price indeed break out? Then the first resistance zone is at 5,750 euros. The resistance will then consequently rise to 5,900 euros.
However, there is of course a chance that there will be no outbreak, in which case we can expect the price to remain within the lines of the channel. Next week Friday the bottom is expected to be 5,600 and the top at around 5,700 euros. On a more serious and potential price impact, the situation around tether is still not resolved. This means that tether can also ensure a substantial price shift of bitcoin. Tomorrow we will talk about tether in more depth.
The information in this technical analysis is not intended as investment advice or as a recommendation to buy or sell cryptocurrencies. Trading in digital currency involves a significant risk.