Bitcoin price analysis (14 - 20 June): don’t get too excited
Bitcoin’s latest rally is likely to face stiff resistance in the $40,924.45 to $42,553.25 zone
Bitcoin’s price reacted to Tesla CEO Elon Musk’s tweet on 13 June confirming the electric car maker plans to “resume allowing bitcoin transactions” after “there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend”.
The sharp rise in bitcoin’s price following the tweet illustrates Musk’s influence on crypto markets.
In other important news last week, El Salvador became the first nation to adopt bitcoin as legal tender. El Salvador’s President Nayib Bukele said the nation plans to use power from its volcanoes to mine Bitcoin.
Taproot, a bitcoin improvement protocol, has received sufficient mining support to lock-in activation. After the soft fork upgrades are “locked-in”, miners and nodes will have five months to update their software to Bitcoin Core 0.2.1.1. Taproot will be activated after bitcoin block 709,632.
Can these developments help bitcoin stage a strong comeback in the short term? Read the bitcoin price trend analysis to find out.
Bitcoin price analysis: Weekly chart
Bitcoin’s price rebounded sharply from its 50-week simple moving average (SMA), indicating strong buying from the bulls at lower levels. The largest cryptocurrency rallied 8.95%, ending last week at $39,008.10.
The BTC/USD pair could now rise to the 20-week exponential moving average (EMA), where bears are likely to mount a stiff resistance. If the price turns down from the 20-week EMA, the pair could consolidate between the two moving averages for the next few weeks.
The relative strength index (RSI) is near its midpoint, indicating a few days of range-bound action.
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If bulls sustain the price above the 20-week EMA, the correction could be over. The pair could gradually move up to $59,619.75. If the price turns down and breaks below the 50-week SMA, selling could intensify and the pair might drop to $20,000.
The bitcoin price weekly analysis shows that bulls are attempting a relief rally. Does the BTC price analysis of the daily chart also support a pullback? Let’s find out.
Bitcoin price analysis: Daily chart
Bitcoin’s price broke above the downtrend line on 13 June, suggesting a pick-up in demand. The pair could now rally to the $40,924.45 to $42,553.25 zone, where bears are likely to mount a stiff resistance.
If the price turns down from there, the pair is likely to again drop to the 20-day EMA. A break below this support could result in a decline to $30,997.95. The flat 20-day EMA and the RSI just above the midpoint suggest a few days of consolidation.
However, if bulls drive the price above the 50-day SMA, it will indicate that the current downtrend is over. That might result in a rally to $51,599.95. Conversely, a break below $30,997.95 could signal the start of a deeper correction.
How to trade bitcoin this week
Bitcoin is likely to face stiff resistance at $40,000 and again at $44,500. The failure to break above this zone could lead to profit-booking by traders who bought the recent dip. That could pull the price down to $34,628.