Bitcoin fell last week to a price of $ 56,500. But it didn’t take long for the currency to start an upswing. BTC has risen almost 13% since then, but is this sustainable? Let’s look at the graphs.
How is BTC doing?
We’ll start this analysis with a look at the weekly chart. Here each candle represents 7 days, allowing us to look far back into the past. This makes two price levels clear, to which the price has previously reacted. These are shown below as red and green zones.
Let’s leave the green zone for what it is. Hopefully this level does not have to apply in the near future. But this level may be important for the long term. It is therefore good to have this clear in advance.
The red zone, on the other hand, is very important. This is the spot that first stopped Bitcoin from dropping beyond $60,000. But when it broke last week, the price fell further to $56,500. The currency now appears to be on the rise, causing it to trade in the red zone again, but we cannot yet completely switch to a positive expectation.
Bitcoin in downward trend
This has to do with the downward trend that Bitcoin is currently experiencing. Due to the decline of the past week, the currency is making lower and lower lows and lower and lower highs. To see (and analyze) this better, we will also briefly look at the 4-hour chart. Here each candle represents – you guessed it – 4 hours.
In this image, two additional blue lines have been drawn to indicate the previous high and low points. You can see that these are lower than the peak and valley before them. So to change trends from here, the coin must move past the top blue line. A higher low could also contribute to this.
For example, Bitcoin may still be in the red zone, but as long as the price does not rise above $64,300, the trend remains downward. It is therefore good to keep an eye on this trend and the price levels.
If the coin breaks past its previous high, things can move very quickly. But it is good to realize that this also applies to the negative scenario – should Bitcoin fall below $56,500.
