Analysis: bitcoin starts the week well and rises 8% (in 8 hours)

Last Updated: 20 July 2022

The week is over again, and that means we can look at bitcoin’s weekly candle again. The market leader fell as low as $18,900 but recovered almost immediately. As a result, one bitcoin now has a price of $22,200.

The week is off to a positive start

The price of bitcoin has not seen any major moves up or down for several weeks. It seemed to rust around a price of 20,000 dollars, but since this morning, the crypto currency seems to be in the mood again. Bitcoin rose a staggering 8% in an 8-hour period, putting the week in bright green.

In the image above, we see the graph of bitcoin, where each candle stands for 1 week. There you can clearly see how the weekly candles come to rest at a key spot — the same price as the all-time high of 2017. Therefore, this could be a perfect place to break out of the downward spiral, and bring some positivity into the market.

Relative strength

In addition to this crucial spot, There is another sign through which a trend change could occur. In the chart, at the bottom of the purple area is an indicator called the Relative Strength Index (RSI). This purple line represents the strength of the preceding 14 candles. So, in this case, the weekly candles.

This indicator has a scale from 0 up to 100, which indicates the strength of the candles. When the indicator gets below 30, this is called the “oversold” area, and is a spot where a price change can take place.

Currently, the RSI has just dropped below 30 but is now moving up again. The last time this happened was in 2018 — at a price of $3,200 — and bitcoin has never returned there. Because of this, it is possible that bitcoin has finally made a bottom after its long decline.

8% in 8 hours

This is partly due to last week’s positive close, which kept bitcoin above the support zone. It is not yet certain whether bitcoin can sustain this, but the week is already off to a very good start. As stated earlier, the price rose by 8% in a period of 8 hours. This can be seen in the chart below, where each candle represents 4 hours.

Since the beginning of the week, bitcoin has been doing well. The price is rising, support has been maintained, and it is finally starting to look like bitcoin is going to change the downward trend.

If bitcoin does manage to close a week below the purple zone, then it’s only time to get pessimistic. Otherwise, we have a couple of great weeks ahead of us.

Author

  • Steven Gray is a journalist with a heart for crypto. He filters the wide range of news and ensures that it reaches the public in a comprehensible way. He often does this with the support of technical analysis.

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