Bitcoin price is shaking, but Newsbit analyst also sees positive signals

You don't have to be a technical analyst to conclude that Bitcoin (BTC) is struggling at the moment. Last week was the third consecutive red week and that has not happened for a number of months. Nevertheless, technical analyst Ivo Melchers of Newsbit sees some hopeful signs that he is holding on to.

Bitcoin is currently in its worst shape in five months. The price has already fallen by about 9 percent in three weeks.

In recent times, the price has been sinking further and further away. Saturday was the lowest point since September 18 of 79,160 dollars and last night there was little difference or that low had already been broken.

Meanwhile, the digital currency has been restored to about 80,400 dollars. It is the umpteenth time that the bulls have now managed to defend the lower trend line of the so-called falling wedge, as Melchers shows.

This is also called a descending wedge and it looks a lot like the bull flag we saw earlier. Only the top line descends faster than the bottom, causing them to walk towards each other.

That says something about the strength of the sellers. Every new top is a lot lower, but every new bottom sinks just a little further away. The sales pressure is therefore slowly running out, while buyers are tapping in faster and faster.

After a rise, this pattern is seen as a pause in the upward trend. The pattern is only confirmed when bitcoin with a day lock breaks out above the top line, which is now around $83,000. If that succeeds, the top of about 87,000dollars will come back into view.

The mice do cut on both sides. If the price breaks below 79,000 dollars, the pattern breaks down and the bottom of mid-September lurks around 75,000 dollars as the next support.

Today, Bitcoin is supported by the falling oil price, but the Iran war still creates a lot of uncertainty. Negotiations between the United States and Iran appear to be dragging on, with fears of further escalation.

And then we also have the upcoming midterm elections in the US that are creating the necessary uncertainty and the AI trade has been under pressure for a while now as investors are becoming increasingly critical of the gigantic investments and the payback period.

The support above $80,000 has been doing its job for a long time, but the price closed below this level yesterday. That does not necessarily mean that a big dump is coming.

At the same time, there are also a number of bullish signals. The price drops further and further away, but there is less and less force behind the decline.

This divergence can be seen in two known indicators. The Relative Strength Index (RSI) measures how much the price has risen or fallen recently, on a scale from 0 to 100. The Moving Average Convergence Divergence (MACD) compares a fast and a slow average of the price and shows whether the pace is increasing or decreasing.

The same principle applies to both. The price is still above the bottom of last month, while the indicators have fallen to lower bottoms. That's called a hidden bullish divergence.

The indicators have therefore cooled considerably, but the price reveals much less ground than that suggests. The RSI even reached its lowest point since 1 July yesterday.

This also indicates a continuation of the upward trend. Should Bitcoin decide to fall a little further, the 50-week average is an important level to defend. That line is currently around $76,000.