BTC Trades Inside Ascending Wedge As Bulls Lose Ground At $50K
- BTC is up by a small 1% over the week as it meets the support at the 20-day MA around $46,300
- The cryptocurrency lost ground near $50,000 earlier in the week after closing above $49,400
- A daily closing candle beyond $50,000 will be required for the bullish surge to continue
After weeks of price growth for Bitcoin, it seems that the buyers might be starting to show signs of slowing down as they pull back from the $50,000 resistance seen earlier in the week. BTC had surged from as low as $37,500 at the start of August and surged as high as $50,500 on Monday this week.
Unfortunately, the cryptocurrency was unable to produce a daily closing candle above the $49,400 (1.272 Fib Extension) and has since rolled over from the 50K resistance. The coin is now trading inside an ascending wedge pattern as the buying pressure starts to slowly fade.
Nevertheless, BTC did find support at the 20-day MA around $46,300 today, and this is further bolstered by the 200-day MA at $46,000. This will be a crucial support to defend to prevent BTC from slipping further lower over the following days.
What has been going on?
Looking at the daily chart above, we can clearly see the ascending wedge pattern starting to form this week. BTC had reached the resistance at $49,325 (1.272 Fib Extension) over the weekend and struggled to break above it.
The cryptocurrency did manage to spike beyond 50K on Monday to reach as high as $50,500. However, it quickly pulled back and closed well beneath 50K. From there, BTC started to show some weakness as it dipped to $48,000 on Tuesday.
After a brief bounce back into the $49,325 resistance on Wednesday, BTC rolled over yesterday and produced a bearish engulfing candle as it dropped beneath $48,000 to close the candle at $46,850. Today, BTC dipped lower to find the support at the 20-day MA around $46,300 and the support at the lower angle of the ascending price channel. It has since pushed higher to the current $47,850 level.
The weakness at 50K is quite important to understand. It shows that the buyers were able to push from as low as 30K at the end of July to produce an enormous bull run to hit the 50K mark with a little-to-no pullback in between. As a result, it is no surprise that the buyers might be exhausted, and a retracement is needed before being able to push higher again.
Bitcoin price short-term prediction: Bullish
The recent price hike over the past three weeks has now turned BTC bullish in the short term. BTC would now have to drop beneath the August support at $37,500 to turn neutral in the short term and would need to continue further beneath $31,500 to be in danger of turning bearish.
If the sellers push lower, the first strong support lies at $46,000 (200-day MA & lower angle of the wedge). Beneath this, added support lies at $45,515 (.382 Fib), $44,000 (.5 Fib), $42,465 (.618 Fib), and $44,000.
Added support lies at $40,300 (.786 Fib & 50-day MA), and $40,000.
Where is the resistance toward the upside?
On the other side, the first resistance now lies at $47,820 (bearish .618 Fib). This is followed by $49,325 (1.272 Fib Extension), $50,000, $50,660 (1.618 Fib Extension), $52,000, and $53,000 (bearish .786 Fib).
To find out more, take a look here which includes fundamental analysis; coincodex.com/article/12090/bitcoin-price-analysis-btc-trades-inside-ascending-wedge-as-bulls-lose-ground-at-50k-this-week/
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