The bitcoin price could build a double technical bottom but this bullish reversal figure is only credible if the institutional traders largely contribute to it. Let’s do a check in
Key technical factors of the article:
- Bitcoin – technical analysis : the Bitcoin price could validate a double bottom bullish reversal configuration on $ 6,500 if the resistance at $ 7,500 / $ 7,870 is exceeded.
- Volume distribution is essential : For a sustainable upward reversal, it is certainly necessary an increase in volume but above all a clear position of professional traders who are again tending towards the buying side.
In a previous technical post, we saw that the annual performance of the bitcoin price in 2019 exceeded 80% but that the market had closed the year quite far from its record at $ 13,900.
After a semester of retracement, the BTC / USD stabilized on technical support trained at $ 6,500 (€ 5,900), a price point that triggered two rebounds in the space of a few weeks.
In technical analysis of the financial markets, the chartist configuration in double bottom belongs to the category of upside reversal figures. It is a lateral transition period that can stop a bearish phase and give the starting point for a bullish streak.
In the case of BTC, this lateral phase has been building since the beginning of last December and it could put an end to the fall in prices since last summer.
In order to activate double bottom training, three conditions must be combined :
- A double rebound on the same technical support.
- Exceeding the “neck line” (the most prominent horizontal threshold that separates the two rebounds on the support).
- A strong increase in volume in general and especially on the part of institutional traders.
Condition number one has been met with the double rebound on $ 6,500 (€ 5,900) and it is currently the only one out of three.
The second condition is in place, but the price of Bitcoin must reach the neck line, or $ 7,870 (€ 7,150) and exceeds it based on a closing price on the daily chart.
To obtain the third condition, the significant resistance overflow must be created by a strong increase in volume, especially among professional traders and it is still here that everything remains to be done.
The next report Commitment Of Traders (COT) of the CFTC on Friday, January 10 will determine if the institutional participate in the increase or not.
If not, there will be no double bottom.
Ultimately, the market seems to be able to fetch the $ 7,870 (€ 7,150). We can’t go any further at the moment. The 2019 chartist uptrend line still serves as the invalidation threshold for the current recovery.
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The technical thresholds and the trend indicated above are based on the technical approach “price, momentum, sentiment, ichimoku”. The data come from Bitstamp and the graphics of TradingView.
We remind you that theinvestment in crypto assets, including Bitcoin, is extremely risky. Cryptocurrency prices are likely to suffer significant andunpredictable price fluctuations.