Bitcoin: the technical impact of the 30% increase in January 2020

Credit: Pixabay – Walid Mahdadi

With over 30% performance in January 2020, the bitcoin price confirmed the bullish reversal initiated last December. Let's do a check in.

Key technical factors of the article:

• The month of January 2020 ends with a performance of more than 30% for the price of Bitcoin, thus confirming the bullish reversal initiated last December.
• Let's review the technical consequences of this strong upward recovery, in particular on the underlying trend.

January 2020 comes to an end this Friday and the relative performance of the bitcoin price is high with more than 30% progression. This upward recovery confirms the technical bullish reversal signals given since last December and progressively detailed in my previous technical posts.

It was the reconquest of the technical threshold of $ 8,500 which served as the trend pivot, giving the double dip configuration at $ 6,500 in December, the status of a major dip. For fans of Japanese candlesticks, I invite you to turn to your graph in monthly data, the candle of January 2020 has not been seen for a very long time.

Bitcoin price – weekly Japanese candles

In this new article, I suggest that you summarize the characteristics of the rebound for 6 weeks, then deduce the impact on the underlying trend and the next major technical thresholds.

The bullish recovery followed all the classic stages of a technical upside reversal. First, a graphical formation of troughs in December on the annual upward trend line, then the overcoming of technical resistance activating the formation and finally the recovery of the pivot at $ 8,500, with an increase in the general volume on the over-the-counter market over the counter and the futures market.

As the histogram below shows, the rebound was accompanied by a doubling of the open position in the market for the Bitcoin futures contract on the Chicago Stock Exchange. Institutional traders increased their buying exposure and reduces their sale, the net balance tends to become positive again.

Institutionals and the Bitcoin future contract (data on 01/21/2020)

On the immediate technical level, a major target has just been reached at $ 9,450, the bottom of the trading range last summer. This is a strong resistance, a step in the recovery, the market could retrace.

The new guarantor of the long uptrend is at $ 8,500 (€ 7,500) and the next step is to reach $ 10,000.

The bullish momentum for the past month has been well constructed, with alternating momentum and retracement (see previous analysis). This market rhythm will continue, traders must therefore wait for support to place themselves and the first tangible level is $ 8,900 / $ 9,000.

Finally, it is the exceeding of $ 10,000 which will be the signal engaging last year's records.

Follow Vincent Ganne on Trading View for further analysis on the financial markets.

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.

This content is provided for informational purposes only and does not constitute an investment recommendation. We remind you that theinvestment in crypto assets, including Bitcoin, is extremely risky. Cryptocurrency prices are prone to large and unpredictable price movements.