Bitcoin (BTC/USD) has broken above the downtrend channel but other resistance levels remain a factor. These include horizontal levels (brown lines) but also the 21 ema zone (price is now in those MA’s).
BTC/USD recently bounced at a long-term moving average but the bullish reaction seems corrective and choppy and a bearish continuation is certainly a possibility in the upcoming days. Price could challenge the round level of $5000 if price does break below the 21 EMAs and previous bottom. For an uptrend to emerge, price must break above the 21 ema and resistance levels with strong momentum.
BTC/USD is showing a strong downtrend because all the moving averages have remains bearish aligned for the entire chart. However, a divergence pattern as price made a new lower low but the oscillator failed to confirm the same bearish momentum. The divergence could indicate a larger bullish correction or reversal but it is not a must. Double divergence is generally speaking a stronger reversal signal. A bearish breakout of the channel is possible but the main question is: how will price react to the previous bottom? A bullish breakout could indicate a larger bullish push. BTC/USD seems indecisive at the moment until a larger breakout occurs.
This image shows BTC/USD while using our SWAT software. The red candles below the moving averages indicate that the bears are in control. Currently price is building a retracement because we see blue candles below the medium-term moving average. A break above this medium MA could indicate a first change of the trend.