Bitcoin Technical Analysis for April 2022

Bitcoin Key Price Levels

Round numbers act as ‘magnets’ that, often, pull assets to them, especially when they are close. At Bitcoins current price being less than 5% below the round 50k mark, that is a magnet supporting many traders and media publishers thinking and discussing the possibility of Bitcoin reaching $50,000, as marked below by the horizontal purple line.

Note also that the BTCUSD key price level of 50k is the middle of the range of the weekly chart, whereby its high is the all time high (ATH) of 69k reached in Nov 2021 and the lowest open of any weekly candle since.

Bitcoin Price Trend

A trend is the price movement of a market or an asset in its general direction. Trendlines and/ channels that emphasize when the price is moving up, down, or sideways are used in technical analysis to identify trends.

Bitcoin continues to be trending up, on the daily timeframe, since 24 January 2022. However, traders should watch how Bitcoin price reacts if and when it reaches the upper band of the illustrated channel, since some traders and trading algorithms who have been in Long positions, may close or reduce their positions (thus selling, and increasing downwards pressure on the bitcoin price).

Bitcoin Candlestick Pattern

A candlestick pattern is a graphical representation of price movement on a candlestick chart that many traders see as anticipating market action, based on historic patterns and price reactions.

Currently, on the monthly chart, Bitcoin is demonstrating a ‘bullish harami’, which is a candlestick chart indication that may be used to detect bear trend reversals, meaning trend transitions from a downtrend to an uptrend.

Bitcoin Moving Averages

The goal of a simple moving average (SMA) is to calculate an average of the market's price over recent periods in order to discern the market's trend. The exponential moving average (EMA) is intended to give greater weight to current and most recent price data, which is seen to be more meaningful than older data. As a result, the EMA “reacts faster” to price movements.

Currently, Bitcoin price on the daily chart is above the 9 EMA, which is above the 20 EMA, so the bitcoin price daily trend is still quite bullish, according to these popular moving averages.

Bitcoin Volume Profile

Volume profile, sometimes referred to as market profile, is an advanced charting analysis that shows trade activity over a set time period and at certain price levels.

The VAH is the ‘Value Area High’, which is the highest price in the Value Area, and traders often utilize it as a resistance level. Oftentimes, the price likes to “pierce” these resistances, trapping new bulls that enter a Long and bet on a breakout up above the resistance.

The below shows the volume profile of Bitcoin since the beginning of 2022, where price may have pierced the previous VAH, and might in the near future find profit takers and trapped bulls (thus declining), even temporarily.