Why $7,050 is the Level to Watch During Bitcoin’s (BTC) Weekly Close

In brief:

Bitcoin (BTC) encountered massive resistance as it tried to break $7,300. 
At the same time, its trade volume has been dropping together with its dominance in the crypto markets. 

In our analysis of Bitcoin (BTC) a few hours ago, we were cautiously optimistic that the King of Crypto was on a slow and tense journey towards $8,000. We also identified a few support zones that include $7,050, $6,900, $6,800 and $6,600.
Why $7,050 is the Level to Watch During Bitcoin’s Weekly Close
Further analyzing the aforementioned support zones, we realize that the $7,050 zone is the last area of defense for Bitcoin before it drops back to familiar levels below $7,000. Therefore, if this level breaks in the next few hours, we will most likely retest $6,900 and possibly back to our strongest support thus far of $6,600.
6-Hr BTC/USDT chart courtesy of Tradingview.com
Revisiting our favorite 6-hour BTC/USDT we begin to spot a few areas of weakness for the King of Crypto that might cause some excitement for the Bears.
To begin with, Bitcoin’s move to claim $7,300 was rejected at the same zone which was a resistance. Its current price of $7,126 is still above the 50 (white), 100 (yellow) and 200 (green) moving averages. These MAs are acting as short term support for Bitcoin, but they are also giving a picture of exhaustion for BTC.
Further checking the trade volume, it has reduced drastically in the last few days. This is a tell-tale sign of a possible move down.
The MFI has a value of 80 thus indicating an overbought situation. This is further confirmed by the MACD about to cross in a bearish manner above the baseline.
Bitcoin Dominance Continues to Drop Slowly
In our April 17th Ethereum price analysis, we had identified that the BTC dominance had dropped by 1% thus providing some level of confidence for ETH to rise in the crypto markets. Rechecking Coinmarketcap, we find that the BTC’s dominance now stands at 63.5% compared to our previous level around 64%. This slow decline in market dominance could provide the perfect environment for a mini-alt season.
Conclusion
As the third week of April 2020 comes to a close, $7,050 will be the level to watch for Bitcoin (BTC). This area provides the last line of support for the King of Crypto before falling back to familiar territory below $7,000. Also to note, is that the Bitcoin trade volume has continued to drop thus providing the case for a bearish weekly close for BTC. Additionally, Bitcoin’s dominance has continued to drop slowly further pointing to a possibility of Ethereum doing well in the crypto markets along with alt-coins.
As with all T.A opinion, the reader is advised to use adequate stop losses to protect their leveraged positions on the various cryptocurrency exchanges.
(Feature image courtesy of Kid Circus on Unsplash.com.)
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.