Key Bitcoin Levels to Watch

Since my last Bitcoin technical review

In the March 2018 “Bitcoin Technical Lesson,” interest and acceptance of cryptocurrencies expanded exponentially. This has resulted in many technical questions about whether some of my usual analysis methods are useful in determining where Bitcoin works.

In 2018, I analyzed the NYSE Bitcoin ($NYXBT) index as I was partially motivated after reading a prediction in March 2018 that it would rise from around $8,500 to $30,000 by the end of 2018. The extreme nature of this projection felt it required more. Research.

I have found pivot analysis to be a useful tool when applied to a wide range of financial markets. It provides important input to my analysis of both long and short term trends. In the past, I’ve written about annual, quarterly and monthly pivot analysis.

Pivot values ​​are derived from this formula and are based on previous time periods. For example, the yearly pivot points for 2022 are based on the highs, lows, and closes of 2021. The monthly pivot points are determined by the price history of the previous month.

On a simplistic level, if prices are above the pivot, this indicates a positive trend with targets at the R1 and R2 resistance levels. If the prices close below the pivot, then this indicates a negative trend with possible targets at the levels of S1 and S2. The negative trend is reversed only by going back over the axis.

Let’s look at the 2018 analysis in terms of yearly pivots as NYXBT closed below the yearly pivot for 2018 at 11,368 the week ending Jan 22nd 2018, point B. This was a negative signal for the main trend.

In 2018, my analysis indicated that the key level of Fibonacci support was at $7,376, line A which was breached a week after the article was published. Target this support at $4,874. The annual S1 was at 3,939. For the next seven months, NYXBT continued to drift lower as in early December 2018, NYSE Bitcoin dropped to $3,251, point C.

Friday, April 29y 2022 I saw the headline “Experts Say Bitcoin Could Hit $100,000…” So in my view, this calls for a new technical assessment. This BTCUSD weekly chart indicates that it closed the year at $46,471. The yearly pivot level for 2022 is $48,259, based on the highs, lows and closes of 2021. So BTCUSD started lower than the 2022 annual pivot. This was then a major resistance level.

BTCUSD hit a record low on January 24y at $32,990 and then started to rebound. on March 24y BTCUSD peaked at $48,208, which is below the yearly pivot, and closed the day at $47,128. The rally stopped below the previous uptrend, line B, which became resistance. In technical analysis, when a resistance level is overcome, it becomes support, and conversely if a support level is broken, it becomes resistance.

The weekly chart is showing a shallow uptrend, and line C, and a weekly close below $34349 would be a sign of a resumption of the downtrend. From May to July of 2021, BTCUSD made lows between $28,908 and $29,320 and is now supporting the chart. 1St The annual pivot support (S1) level at $27,540 is also a potential bearish target.

The MACD-Histogram or MACD-His I have found to be an excellent momentum indicator, especially when used in weekly data. As BTCUSD peaked in November of 2021 at $68,978 and formed higher tops, Line A, the MACD-His indicator was giving a different picture. MACD-His formed sharply lower highs, line d, which was consistent with the top as momentum was slowing as prices rose. This is known as a bearish or negative divergence.

His MACD fell below zero after four weeks on November 29y, The year 2021 was a sign of weakness. The MACD-His indicator managed to turn positive after a ten-week rally from its lows in early 2022. It only remained positive for two weeks with the rally peaking in March (point B) as its MACD turned negative again. A weak buy signal usually warns of further decline.

Chart and technical studies favor more weakness in BTCUSD During 2022. It may take a weekly close above the yearly pivot at $48,259 to change direction. I will update this analysis if key levels of support or resistance are overcome.

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