Bitcoin analysis $40,000 must be overcome quickly

Strong Rise

Bitcoin is on a roll! Since bouncing on the DMA350, bitcoin has made no less than 8 green days in a row, including today. That hasn’t happened since December 2020. There is tremendous pressure behind it. But what goes up quickly sometimes goes down quickly. Better to build in some consolidation areas.

It looks like we are getting it now, as the area around $40,000 (€33,853) is providing some resistance for now. Is it enough to stop this advance? Let’s take a look.

Rapid advance

We start with the daily chart below, in dollars and one candle for each day, and immediately see the accumulation of green candles that shot us from $29,800 (25,221 euros) to $40,000 (33,853 euros). Volume (the bars at the bottom) also looks good. Any resistance from the EMA100 and the EMA200 does not seem to be there. EMA stands for ‘Exponential Moving Average’ and is a moving weighted average over a number of candles. The EMAs often provide dynamic support or resistance. But now they don’t seem to be participating. That says something about the strength of this rapid advance.

Strong Rise

We have arrived at a bitcoin price of 40,500 dollars (34,277 euros) and see that this level was also reached on Monday, but then it did not manage to breakthrough. In itself not surprising because the round numbers are always a lot of buy and sell orders. It is important that we break through this in the coming days because bitcoin has already shown that it can quickly fall from 40 to sub-30, see the red arrow. How is bitcoin doing in a lower time frame?

Selling zone needs to be closed

On the 4-hour chart below you can see that only two serious attempts to break resistance have been made so far. This time, $36,850 (€31,187) gave support and could become serious new support if it happens more often.

For now, above $40,000 (33,853 euros) is a sell zone and it has yet to be broken. The coming days will have to show whether everything can be bought up and we can continue upwards. What can we expect in the longer term? For that, we take a look at the weekly chart as well.

Great Week

On the weekly chart below we can see that bitcoin has currently overcome the EMA21 and the resistance of $39,000 (33,000 euros). At the weekly level, it is important to stay above the EMA21 and if the entire weekly candle can close above it is really very good!

Furthermore, we see the Stochastic RSI. First, some clarification. There is a purchasing power indicator, the RSI. And there is a price-momentum indicator, the Stochastic. When you combine these two you get the Stochastic RSI. The purple line is the value of the Stochastic RSI (between 0 and 100). The orange line is the moving average of that same Stochastic RSI. So when the value (purple) rises above the recent average (orange), it is an indication that the trend is up. The Stochastic RSI is a very sensitive indicator and reacts quickly to changes.

This is the 20th week in a row that the Stochastic RSI has been below the purple band, below 20. This week has the potential to get the Stochastic RSI back above 20 in a long time. This means on a weekly level that good times are ahead. The best way to see the Stochastic RSI above 50 is to look at the purple arrow to see what could happen. Although it does not indicate how big the rise will be, just that it will go up.

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