Momentum Slows as Bulls Cool Down Following 4-Week Rally

The crypto economy has dropped more than 2% on Monday morning as equity futures show U.S. stocks may slip a hair on Monday following a four-week winning streak. Bitcoin has slid 2% over the past 24 hours against the U.S. dollar and it’s dropped 3.4% since the high of $38,437 recorded on November 25.

Bitcoin

As of November 27, 2023, bitcoin’s price stands at $36,951, marking a notable movement within its 24-hour range of $36,899 to $37,748. The current market capitalization is at $725 billion, with a trade volume of $16.79 billion. Oscillators, key indicators for market momentum, present a mixed outlook for bitcoin on Monday.

The relative strength index (RSI) at 57 suggests a neutral to near-bearish stance, indicating neither overbought nor oversold conditions. Similarly, the Stochastic and the commodity channel index (CCI) stand at 71 and 51 respectively, both aligning with neutral sentiment. This collectively suggests a market in balance, without clear overextension in either direction.

Moving averages show a divergent and unique picture. Short-term exponential (EMA) and simple moving averages (SMA) for 10 days signal a bearish outlook. However, as we extend the timeline, EMAs and SMAs from 20 to 200 days progressively switch from neutral to bullish signals. This indicates that while immediate sentiment is cautious, the long-term view remains positive.

The daily chart reveals a bullish trend since early October, characterized by higher lows and higher highs. Despite recent volatility, as evidenced by larger candle wicks, the market has shown resilience. Support is identified near the $33,000 range, with significant resistance around a $38,437 top reached two days ago. However, volume analysis shows inconsistency, suggesting a lack of strong conviction in the price direction, adding an element of uncertainty to future trading sessions.

On a more granular level, the four-hour chart indicates a short-term downtrend, with lower highs and lower lows since the peak two days ago. Current bearish candles suggest this downtrend may continue further. The next support level is around $35,651, with resistance at the recent peak. Trading volume is lower on Monday, with a 1.89% decline since Sunday.

Bull Verdict:

In summary, the technical analysis of bitcoin as of November 27, 2023, leans towards a bullish outlook. Despite the short-term sell signals and immediate volatility, the long-term moving averages and overall market trend suggest a positive trajectory.

Bear Verdict:

Conversely, the bearish perspective on bitcoin’s current technical analysis suggests caution. The immediate sell signals from short-term moving averages, coupled with a downtrend in the four-hour chart, indicate potential short-term price declines.