Bitcoin (BTC) made a textbook move last week and broke out downward from the rising wedge it had been in for exactly 3 months. After the breakout, Bitcoin fell by -12.94% in three consecutive days. Rising wedges have a higher chance of breaking downwards; hence, this move did not surprise many traders.
Curious to know how Bitcoin will perform next week? Read on to find out.
Previous Analysis
Bitcoin broke down from the rising wedge and consequently broke below the 21-day moving average. The analysis showed that Bitcoin would continue going down because of the intensive market sell pressure, and there were two main targets: $21,729 and $18,910. BTC managed to break below the $21,500 support, but surprisingly and pretty weak support at $20,900 held its own.
Bitcoin is currently trading at $21,516.
BTC Price Next Week
Now that the last analysis came true, where is Bitcoin going next? BTC has been trending below the 21-day moving average since August 18, two days after the breakout. The asset is also below the 200-day EMA
BTC Bullish Scenario
Bitcoin is currently trying to retest the 21-day EMA. If BTC breaks out, it will have to tackle another relatively formidable local resistance at $23,800 before retesting the falling wedge’s bottom trend line.
Additionally, the 200-day moving average has been inching closer to price action. It seems the indicator grew tired of waiting for price action to reach up to it and decided to meet Bitcoin halfway. If BTC bulls persist, the price action will meet the 200-day moving average (projected in blue) at around $27,736. If BTC breaks above this indicator, folks, we are back in bull season.
Bearish Scenario
BTC will be continuing its descent ever so gracefully into the sub-20k region. If the 21-day moving average retest is rejected, Bitcoin will spiral down to the next reasonable support of $18,910.
Final Thoughts
While some traders might have been surprised by the Bitcoin move, it certainly did not surprise our readers since we had already covered this potential scenario the week before it happened.
Bitcoin price is heavily manipulated by whales, hedge funds, centralized exchanges and VCs. And therefore, the analyses we do here can break down under such external influences. This is why fundamental analysis is important. Knowing what is happening in the market throughout the week plays a big role in determining where to put more weight; bullish or bearish scenario.
Verdict: Bears.
The bearish scenario is much stronger and has more indicators going on for it than the bullish scenario. Since this is a game of chance, bears have a higher chance of prevailing in the coming week than bulls.
NOTE: This is not financial advice, but it can be helpful when you’re doing your due diligence.