Bitcoin continues to fight resistance between $28,000-$30,000

On Friday, Bitcoin dropped to $25,800, marking a fresh low since the peak on 14th April 2023. Following this drop, the price remained relatively stable on Saturday. Nevertheless, Bitcoin started to surge on Sunday, surpassing $27,000. Then today, it broke above $27,500. During this short period, several technical developments started to take place on the daily chart. In particular, the reversal of RSI and Stochastic (on the daily time frame) caught our attention as it is usually a bullish sign. However, with elevated market volatility, such reversals can be very deceptive (as RSI and Stochastic might start quickly reversing to the downside again if the price starts falling). Due to this potential deception, we will take time to better understand what is going on; we will pay close attention to MACD and ADX. If MACD stays below the midpoint, it will keep the bearish thesis for the short-term alive. Contrarily, if MACD breaks above the midpoint, it will likely foreshadow another retest of $30,000. As for the ADX, it currently indicates a bearish trend with growing momentum. Unless DM+ and DM- start converging (and ADX declining), this constellation will continue to support a bearish thesis in the short term.

Illustration 1.01
Illustration 1.01 displays the daily chart of BTCUSD. Yellow arrows indicate recent technical developments. Simple moving averages (20-day SMA and 50-day SMA) act as resistance levels.

Technical analysis
Daily time frame = Slightly bearish/Neutral
Weekly time frame = Neutral

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.