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The recent withdrawal of Bitcoin (BTC) from peaks above $ 4,200 could trap bears on the wrong side of the market, indicates the price volume analysis.
The main cryptocurrency for market value is currently trading near $ 3,848, with a timing of $ 3,642 on December 28th. At that level, BTC was down 14.7% from the December 24 high of $ 4,272, according to CoinMarketCap.
In particular, the daily trading volumes of all cryptocurrency exchanges have declined in recent days. At the time of the press, the 24-hour trading volume was $ 4.57 billion, down 36% from the December 24 high to $ 7.24 billion.
A withdrawal of low-volume prices is widely considered a sign of weak buyers coming out of the market and therefore considered insignificant. Therefore, the recent decline is probably a temporary correction and the downtrend downward trend signaled by the 3-day chart of 20 December is still valid.
The bullish case, however, would weaken if the cryptocurrency dropped below the key support close to $ 3,550.
3 day chart
As seen above (prices as per Bitstamp), BTC closed at $ 4,073 on December 20, confirming a bullish reversal of the external candle (change from bear to bull).
So far, however, follow-through has been daunting. Prices have fallen in the last ten days, but also volumes.
The bullish reversal, however, would be invalidated if and when the bullish minimum of $ 3,566 carved out on December 27th was violated.
6 hours and 1 hour chart
The interruption of the triangle displayed in the 6-hour chart indicates that the December minimum rally of $ 3,122 has been resumed.
Meanwhile, the bull flag breakout seen in the hourly chart indicates a rally recovery from the January 1 low of $ 3,629.
Therefore, the path of least resistance is on the upper side.
Daily chart
On the daily chart, BTC is probably cropping a reverse inversion pattern of the head and shoulders with the neckline resistance at $ 4,170.
The upside down on the 3-day chart and intraday indicates the space for a $ 4,170 test in the coming days.
It is worth noting that the 50-day moving average (MA) is still trending south, indicating a bearish configuration. As a result, BTC could attract bears if the MA obstacle, currently at $ 3,900, turns out to be a tough one to crack in the next 48 hours.
view
- The decline in low Bitcoin volumes from recent highs above $ 4,200 is nothing but a temporary correction.
- BTC remains on the hunt for a break above $ 4,000. The bulls, however, need progress soon, as the repeated failure to take the 50-day MA of $ 3,900 could prove costly.
- A break below the December 27th low of $ 3,566 will open the door to a new December minimum test of $ 3,122.
Revelation: The author does not hold cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts of Trading View
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