Down But Not Out: One Line Bitcoin Should Be Bullish

Bitcoin price is declining, testing the low $26,000 area of ​​support after weeks of painful, sideways consolidation.

While the horizontal support line is clearly important, it is nowhere near as important as another line that BTCUSD must hold in order to remain bullish.

Drawing Trend Lines in Bitcoin Technical Analysis

In the practice of technical analysis, drawing trend lines is one of the first basic steps anyone takes. Simply connect lines to different points on the chart to highlight support and resistance.support and resistance,

Another basic step involves turning to technical indicators to look for potential buy and sell signals. Some of these tools call out when an asset is overbought or oversold, such as the Relative Strength Index.

More advanced techniques include graphing lines on indicators such as the RSI instead of price. Just as drawing these lines diagonally from point to point can plot an uptrend or downtrend, horizontal lines can also act as support or resistance on the RSI.

Bitcoin price has recovered to a reading of 53 on the RSI on the weekly time frame. According to past price history, this level should hold. Every time this happens, the crypto market booms.

Holding the line is imperative | BTCUSD on TradingView.com

Bulls should show “strength” at current levels

The BTCUSD weekly chart above shows the RSI pulling back to a reading of 53. The last time this happened was in Q3 of 2020, right before an epic bull run. The short bullish rally of 2019 was completely destroyed without any level retest.

Prior to these instances, all other results were surprisingly bullish when bitcoin held above the line. BTCUSD Weekly RSI In 2016 and 2017 instead of falling into a bearish phase each time, the crypto market simply marched higher.

For the second time, a bear market ensued when BTCUSD failed to hold this line. A failed attempt to move back above the level usually leads to the final phase of a bear market. However, rising above this and then not holding back could remind the crypto market of the post-COVID fallout and is something to watch closely. Hold the line, and the bulls will run again, possibly to new all-time highs.