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Bitcoin: 200-week MA acts as key support
Key support and resistance levels are located at $ 5,300 and $ 6,900.
BTC is above the 200-week moving average.
Additional short-term support levels pass at $ 5,750 and $ 5,050.
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Bitcoin rallied earlier this week, peaking at $ 6,957 on March 25th. However, the cryptocurrency could not hold its position and rolled back, ending the week at $ 5881.
An inverted hammer has formed on the weekly candlestick chart, which in this case is considered a bearish pattern, as it is in the mainstream of a downtrend.
An inverted hammer has formed on the weekly candlestick chart. In the context of longer term dynamics, this candlestick pattern is a bearish pattern.
In the process, the price formed two long candlestick wicks in a row, which signals a strong downward pressure and resistance. Moreover, these wicks are in the region of the $ 6,900 mark, which previously served as support and is now resistance. As long as the price remains below this level. Bitcoin dynamics are considered bearish.
On weekly timeframes, the nearest support is at $ 5300, where the 200-week moving average (MA) is also located. The loss of this zone may lead to a rapid fall due to the absence of significant support levels up to the level of $ 4000.
Weekly close above 200-week moving average is a positive signal, but all other indicators indicate continued bearish sentiment.
On the short-term charts, it can be seen that the quotes have broken the ascending support line, which has been followed since reaching the $ 3850 low on March 13. Bitcoin made a bearish breakout on March 28 and has been declining since then. Despite the smooth nature of this breakout, not even the slightest upward rebound followed..
Two key support levels are at $ 5750 and $ 5050. Now the price is close to the first level.
It is possible that a hundred cryptocurrency will turn around in this area and go up, the lack of a clear trading structure and bullish divergence signals, as well as negative prospects on longer-term charts indicate the likelihood of a fall to the $ 5050 area.
The current relief rally at $ 5,800 is unlikely to continue and looks more like a bounce before falling towards $ 5050 support.
So, Bitcoin bounced off the $ 6,900 resistance area and formed a second consecutive long upper candlestick wick. The price has lost its upward support line, which has remained relevant for two weeks, and is now likely to decline down to the support level indicated above.
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