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Technical analysis merely offers one piece to the puzzle in increasing your probability of successful trades but it's probably the fastest and most efficient place to start since you don't have to pour over a ton of data/sentiment/etc to get a lot of solid information quickly.
There are a ton of "indicators" of varying popularity and usefulness. I have found that simplicity trumps complexity. Not necessarily because simple indicators are more effective overall (more data, after all, is usually better), but rather, because swimming in a sea of complexity causes two huge problems. Firstly, you might overload yourself with information. But more importantly, the simpler things are, the less mental bandwidth, attention, and overall time you have to invest in things. I am a man of efficiency and therefore I always opt for the most bang for my buck (time). Volume, as simple as it is, is a hugely powerful indicator. There is a lot of insight to be gleaned by just how interested a market was around a particular price. Besides volume, the next most useful metric is price itself. Out of the one thousand indicators that exist to gauge price action, I find the simple moving average to be wildly efficient for gauging longer term valuation. It is also quite useful on the mid term and somewhat handy for the short term. Too be honest, everything beyond that (bands, RSI, etc), as popular as it may be, is unnecessary complexity. The final factors I consider are previous highs/lows, highly visible "trend lines", and psychological levels such as big evens, like 10k, 50k, etc.
For all of my charts, a red line will be the 200 MA, an orange is the 100 MA, a yellow the 50 MA, and a light blue the 21 MA. The stacked grey and orange bars directly to the right of the price line is the volume profile for recent trading activity, ie: how much volume has been traded around a particular price. All of the other drawings on this particular chart were from some charting I did a couple months ago to determine where a sell off would take us and where it would be a good idea to buy back in. The dashed horizontal lines are the points I was considering reentry. I have left them on the chart as honestly I feel like they still make sense. I wasn't quite right at calling the top at 58k but heck who cares, virtually nobody can call the exact top. To begin with we'll be looking at the daily chart since this is probably overall the most popular range and is also quite useful.
Our lovely daily chart shows the 200 day MA (red line) at almost exactly 40,000. Both the 100 and 50 day MA are hovering around 54k. Because we had a pretty deep break below the 200 day MA, this typically suggests that we are no longer in an uptrend and as such we mostly look to levels which are above the 200day as resistance rather than support. Thus, we would conclude that it would take quite a lot of pressure to see a short term break above 54k. In addition to that, 40k itself has now become a point of contention and should also be viewed as a point of resistance, albeit perhaps not as strong of one as the area occupied by both the 50 and 100day. Now let's look at that weekly chart.
The 50week MA is at about 28k. The 50week is roughly an average of the price action over the entire year (there are 52 weeks in a year), but I guess I like using 50 instead of 52week because it's barely different and I hate changing it between 50 and 52 on the weekly and daily charts. Generally for BTC, price tends to revert to the 50week over time. It swings above and below it again and again, but always eventually returns to it. As such, it's usually a helpful gauge of where price "should" be. In any case, as 28k is below our current market price of BTC, we can treat it as both a level that price wants to pull towards but also as pretty solid support. The 100week MA is a very long term indicator but offers insight for extremely powerful points of resistance/support. It currently sits at about 18,500, suggesting that it is extremely unlikely for price to break beneath that any time soon. The 21week MA is not as commonly used as the 50 and 100 when considering longer time frames but for the sake of consideration it is at 48k which suggests some degree of resistance here. Let's move on to volume.
There is really big volume around 57k. This indicates powerful resistance that would prevent an upward move. There is also a good amount of general activity from 57k down to 44k indicating general resistance. There is less volume from 44k down to 30k meaning movement between this range will be easier (and price action most volatile). Finally, there is very weak volume between 30k and 20k, which suggests that if there is a significant break below 30k it wouldn't take a lot of pressure for price to keep falling. On the plus side there is a great deal of volume around 20k indicating strong support. As a final bonus, we'll take a look at a short term, 4 hour chart.
The 50MA sits at about 44k and the 21MA at 40k. This simply suggests that in the short term there is decent resistance at those levels. However, on a recent time frame, there has been a lot of volume around 38k to 44k. Average that to 41k, and we see even greater resistance. How about a long range view for some fancy lines?
Not a whole lot of new information here other than some very strong logarithmic trend support around 20k and some semblance but not necessarily strong logarithmic resistance around 50k+.
Some final thoughts and wrap up. If we assume we are now in a downtrend, then on the long term we see that there is still plenty of room for BTC to fall. Particularly, we have downward force from the 50week MA pulling us towards 28k. On the shorter scale of things, we see a great deal of resistance at 54k and some decent resistance at 40k. On the less useful, shortest time frame, we see all resistance coalescing around 41-42k. As far as volume is concerned, we have big resistance around 55k. Heavy action around 34k suggesting we'll hang around here for a while. Very weak volume support between 30k and 20k. Huge psychological support around 20k because of previous all time high and logarithmic trend. Furthermore the volume also agrees with support at 20k.
The tl;dr of all of this? I would say that roughly, assuming a downtrend, we need a lot of oomph to get back above 42k. An incredible amount of oomph would be necessary for a break over 60k. We have a lot of pressure to keep us in the 30-40k range for a while. But we still have downward pressure, and a significant break below 30k might mean a free fall that brings us closer to 20k which would offer a crazy amount of support. Most signs point towards a pull to 30k in general due to its psychological evenness as well as it lining up nicely with the 50week MA and the lower range of volume for current price range.
Of course all of this is just based on past performance and is just trends that everyone looks at and things have leaned towards in the past. It certainly no divination of the future. It's just a way to frame things. But the fact that so many "important" numbers are condensing around similar areas is worth considering. I am pretty confident we'll see most action around 30k-40k in the coming weeks and am sure that it would take something pretty big to take us over 60k again any time soon. For all the bulls out there, you better hope we stay above 30k.
