In late Friday trading, Bitcoin (BTCUSD) has seen a resurgence in demand and has recovered all the ground it lost in Thursday’s trading session. It is now trading at 8,357 after briefly violating the previous support-turned-resistance at 8289 on the weekly chart.
In the last six months, most of Bitcoin’s big moves have occurred either during the weekend, or on Friday heading into the weekend as well as on Monday. With this latest price recovery, Bitcoin is now challenging the 8289 resistance level once more.
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Weekend Outlook for BTCUSD
In my analysis piece of Wednesday for Bitcoin, I pointed out that the only parameters to be used in determining a downside break of the 7707 support would have to be a close below that price by the weekly candle, or a double candle close on the daily chart (i.e. close of both Thursday and Friday’s candles) below that price level.
As at this time, both criteria have not been fulfilled. It is not uncommon to see the kind of fake breakdown that we saw yesterday happening. These are moves by the institutional players and whales to hunt the stops of retail traders who were deceived by yesterday’s daily close into thinking that BTCUSD had broken below the support and was going to head south immediately.
Having taken the short orders out, BTCUSD is expected to challenge the 8289 resistance this weekend. Again, we need to see a close of the weekly candle above this price level by at least a 3% penetration (supported by high buying volume), or a close of at least two successive daily candles above that price level, to conclude that a break has occurred to the upside.
A break above 8289 opens the door to the next resistance posed by the descending trendline around 8800. Above this price level will bring 9300 (50% Fibonacci retracement from a trace of swing high of Nov 2017 to swing low of December 2018) into focus.
Resistance at 8289 opens the door for a retest of 7707. The range between these price levels is getting tighter, compressed by the descending trendline which forms the upper border of the descending triangle. A breakout to the downside is the expected future outcome of this pattern, and this may be close given that price is nearly at the triangle’s apex
The next 2-3 weeks could be interesting for Bitcoin traders and the cryptocurrency market in general.Download our latest quarterly market outlookfor our longer-term trade ideas.
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