Is Bitcoin Turning Resistance into Support?

27 May 2020

Bitcoin has been in a very tight range for the last month, despite halving on May 11. It might not be ready to rally immediately, but the bullish pressure seems to be growing.

Today we’re focused on the downward-sloping trendline that’s formed in the last year. It’s been a clear negative for price that needs to be overcome before buyers can return with confidence.

The last week or so has been positive on that front as BTCUSD comes down to hold the trendline. Old resistance could be turning into new support, which is usually a positive thing.

Another bullish signal was the false breakdown below $8,500 on May 10-11. This was followed by a higher low above $8,600 on Memorial Day.

Stochastics are also nearing an oversold condition. Finally, BTCUSD’s 50-day simple moving average (SMA) has risen above its 200-day SMA. This so-called Golden Cross isn’t the biggest deal for cryptos, but it still has some relevance for some chart watchers.

Meanwhile, some potentially bullish narratives are also lining up fundamentally as China promotes the idea of a central bank digital currency (CBDC) and the number of hodlers (buy and hold wallets) keeps increasing.