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Bitcoin Still Looks to Effectiveness of $7K Support After Breaking Into Consolidation Area: Crypto Market Daily

2020.04.07 OKEx

Tuesday, April 7: Cryptocurrency markets are solidly in the green today. 

Of the top three coins, Ether (ETH) has seen the most growth on the day, up over 13 percent to trade around $175. The coin grew significantly starting yesterday, from the $145 area, where it had been trading since Friday, April 3. 

Bitcoin (BTC) also saw strong growth over the past few days, managing to break beyond $7,000 without immediately falling back down. The leading cryptocurrency is up about 4 percent on the day and trading around $7,400.

Ripple’s XRP has also broken its former short-term resistance level, trading around $0.202, up about 8 percent on the day.

Bitcoin faces hard resistance at $7,500-$7,900

4H chart BTC/USD Perpetual Swap data. Source: OKEx.com

BTC has continued to consolidate above $6,700 over the weekend after breaking over that mark on Friday, April 3. The price again broke through $7,000 yesterday, April 6, and reached a new recent high this morning. After touching $7,460, the price has been under pressure and is in consolidation currently.

OKEx’s market analysis team believes that price and the Moving Average Convergence Divergence (MACD) indicates a top divergence as the 4-hour chart above shows. This is a signal of bullish weakening.

However, investors should note that the divergence always ends when the price meets a hard resistance. Investors should beware of a dump, as the area between $7,500-$7,900 is an absolutely hard resistance area. 

If the short-term trend can stabilize above $7,000 after entering a correction, it means that the bulls are gradually growing stronger. On the contrary, if the price falls below $7,000 again, it’s possible that the market will continue to release a signal of correcting the previous oversold trend.

BTC 1D chart shows volumes lack significant improvement

1D chart BTC/USD Perpetual Swap data. Source: OKEx.com

Bitcoin’s 1-day chart above is showing that the recent callback bottom is firmly above $6,700. This may mean that the bulls that have been stuck in the previous plunge are gradually being released.

However, subject to recent market sentiment, BTC has not completely gotten rid of the downturn. Trading volume lacks significant improvement, so even if the price has broken through $7,300, there is still the possibility of stagnation and falling at any time.

Not to mention that the area of $7,500-$7,950 is near the neckline of the counter-intensive area at the bottom of 2019. The resistance makes the probability of testing a new high small. 

Bitcoin’s volume chart still shows a weakening buying level currently. This means that it is not a good choice to enter a long position, as the bullish emotion needs to be tested to see if it’s becoming better or not. 

Resistance and support levels

  • Short-term resistance: $7,400       
  • Medium-term resistance: $7,500
  • Short-term support: $7,250
  • Medium-term support: $7,000

ETH bulls see signs of recovery 

4H ETH/USD Perpetual Swap data. Source: OKEx.com

ETH recently got rid of a downturn. With the increase in the amount of buy funds, the bulls have some signs of recovery. 

ETH has risen by more than 13 percent in the past 24 hours. The price is now under pressure at the hard resistance of $180. From the current trend, the price has closed with an absolutely long inverted hammer within a single hour, during which it reached the new high, and the resistance above was strong.

Investors should pay attention to the short-term correction range — if ETH can stand firm at $165, it may continue to be bullish.

The volume chart shows that buying funds are becoming larger than last week. If the price can keep at the current level or increase higher, it’s possible to break $180. Otherwise, a pullback to $165 to find support is a more likely event.

Resistance and support levels

  • Short-term resistance: $180    
  • Medium-term resistance: $190
  • Short-term support: $165          
  • Medium-term support: $160

XRP breaks into its previous consolidation area

4H XRP/USD Perpetual Swap data. Source: OKEx.com

XRP started a rebound near $0.1780, and continued to break through the upper edge of the consolidation area at $0.1880 over the next few hours. 

After testing $0.20, the trend may continue to pump if the price falls back slightly and stabilizes above $ 0.1880. 

Investors should be aware that $0.2060 used to be the last consolidation area before the plunge in mid-March. If the price can break that point, that means that a real rebound may be coming and the trend is likely to move out of its weak state. Combined with the growth in volume, it’s possible to test $0.2060 this week.

Resistance and support levels

  • Short-term resistance: $0.2060
  • Medium-term resistance: $0.2140
  • Short-term support: $0.1950    
  • Medium-term support: $0.1880


Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.


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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

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