Bitcoin Technical Analysis Dec'18 - Long-Term Overview Of The War Between Resistance And Support Levels

CoinSwitch | 19 December, 2018 | 2 min

Bitcoin is going through massive pain areas as compared to the other cryptos, as it has been affected the most in this bearish time frame. We have given here the technical analysis for the long-term scenario and short-term scenario, with all of its possibilities. The price is volatile enough to move in any direction- up, down or sideways.

Bitcoin USD Live chart states that currently, Bitcoin is trading at $3550.28 with a market capitalization of $62,477,511,147 and circulating supply of 17,429,512 BTC.

First, let us represent the long-term monthly time frame chart of Bitcoin live ticker- XBT/USD (BitMex) as per Bitcoin stock price, which covers both resistance and support levels with Bitcoin candlestick charts as well.

Long-Term Analysis (A Month Timeframe)

Scenario 1: Bullish (Uptrend)

If the Monthly candle (December) closes with price above $3430 with decent buy volume then we might see the price the testing the "Resistance Zone 2" ranging from $4207-$4700 within few weeks.

Few other factors in confluence with the bullish scenario:

1) Stochastic RSI is in the Oversold Region (its a region where asset price is likely to rebound or bounce).

2) Selling Volume (red bars at the bottom of the chart) is declining i.e. sellers are getting exhausted.

Scenario 2: Bearish (Downtrend)

If the Monthly candle (December) closes with the price below $3430 with decent buy volume then we might see the price, the testing, the "Support (Buying) Zone 1" ranging from $2400-$2900 within few weeks.

If that support doesn't hold (no buying interest) then we might see "Support (Buying) Zone 2" followed by last "Support Zone 3".

Factors in confluence with Bearish Scenario

Support Zone 3 ranging from $1100-$1300 is the High of the previous Bull market cycle (2013) and might get a retest to follow market cycle rule (not mandatory but likely).
 

Scenario 3: Ranging Scenario

One of the scenarios which people often ignore is that an asset ranges between two boundary zones for some weeks and months before moving into strong trends (Upward or Downward) just like Bitcoin did between price levels $5800-$6400 for 3 months (September-November'18) before making a major move downtrend to $3100 price level.

There are permutations and combinations you can apply between different zones (Resistance and Support) on the chart to form Ranging Zones.

These are areas where major market participants (Institutional Investors) accumulate before a big change in direction of the price.

Note: Monthly time frame charts illustrates the movement of price over a long-term horizon and are most often used by long-term investors.

Short-Term Analysis (Daily and Weekly)

Let's take both the bullish and bearish scenario for the short-term time frame.

Scenario 1: Bullish (Uptrend)

If BTC close above $3650 Daily and the weekly frame shows a reversal pattern (Green Engulfing candle) we might enter at these levels ($3600) with a target around $4000+ which eventually might restest Resistance Zone ($4400-$5400) in the coming weeks.

Scenario 2: Bearish (Downtrend)

If BTC couldn’t break the previous support ($3600) turned resistance in the coming weeks then there are two Bounce(rebound) zone for Bullish reversal ranging from $1800-$2400 and $896-$1200 for coming weeks and month.

Now, we have reached the last segment of our analysis where we will mention the news and event analysis

  • Institutional bodies are getting interested in cryptocurrencies. One such example is the U.S. state of Ohio accepting tax payments. Merchants like Overstock, eGifter, Expedia, Shopify accept Bitcoins as payments and several people are testifying on social media how they purchased goods and services with cryptocurrencies such as BTC, ETH, and BNB.
  • The supply of Bitcoin is finite and limited to 21 Million hence the demand is not going down. Second, that the number of Bitcoins generated per block is set to decrease by 50% every 210,000 blocks. For example, if today each miner receives 12.5 Bitcoins for solving (mining) a block, after the next halving event they will receive only 6.25 BTC and so forth.
  • 2018 was filled with rumors of institutional investors buying into cryptocurrencies, especially Bitcoin. Several times, the Bitcoin ETF has been rejected in 2018. But recently an SEC commissioner has started a Bitcoin ETF is definitely possible. In 2019, NASDAQ is going to work with the US Commodity Futures Trading Commission (CFTC) to launch Bitcoin futures in the first quarter of 2019.

Conclusion

While bull and bear markets are nothing new in the financial world and Bitcoin has been through the bear cycle before and recovered well from it with given time. Bitcoin is here to stay, it’s worth exploring the drops in value and equally fast recovery the currency has experienced. History shows that the top cryptocurrency has sustained much more rapid losses during a shorter period of time over the course of the past several years, and has not discouraged long-term investors.

If you have any views or feedback on this article, please do drop us an email to support@coinswitch.co. We will appreciate it.
 

Note: The above references are for information and educational purposes only. It is not intended to be a piece of investment advice.

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