Bitcoin (BTC) fell sharply in the week of February 13-20, breaking below both short-term and long-term support levels.

Weekly Outlook

BTC has been up since the week of January 24-31. The uptrend initially looked like it would create a morning star candlestick pattern, which is commonly viewed as a bullish reversal pattern.

However, in the following weeks, the trend reversed and Bitcoin created two bearish candlesticks with long wicks above (red symbol). This has eliminated the possibility of a morning star pattern.

The price is currently nearing the January 24 low of $32,917.

BTC/USDT weekly chart | Source: TradingView

The technical indicators on the weekly time frame are showing mixed signals but are sloping down.

MACD and RSI are both down and falling. The decline is particularly evident in the RSI, which has dipped below 50. The RSI is a momentum indicator and readings below 50 are considered a sign of weakness.

On the upside, BTC fell below the lower band of the Bollinger Band indicator on Jan. 24. A deviation below the band (red symbol) has previously resulted in a significant reversal of the uptrend and vice versa.

BTC/USDT weekly chart | Source: TradingView

Bitcoin is struggling to find support

The daily chart is also providing mixed signals but is still tilted down.

MACD and RSI are both bearish. This drop is more noticeable on the latter indicator as it just broke the ascending support line and dropped below the 50 level. As shown above, this is a downtrend related development.

On the upside, Bitcoin broke above the descending resistance line on Feb 4th. This could mean that the current decline could just be a retracement in response to the breakout.

However, the subsequent bullish move after the breakout is minimal, not even reaching the 0.382 Fib retracement resistance.

BTC/USDT daily chart | Source: TradingView

On the 6-hour timeframe, Bitcoin broke the ascending support line and is currently attempting to find support.

It recovered slightly from the 0.618 Fib retracement support at $37.860. This is both a horizontal support and a fib support.

The next support is found at $36,200 created by the horizontal support area.

BTC/USDT 6 hour chart | Source: TradingView

Short term movement

Finally, the two-hour chart shows the two previous falls at a ratio of 1:1.61. Therefore, it is possible for the pattern to complete and a reversal to occur.

If there is a reversal, the $39,600 and $40,600 levels are likely to act as resistance.

However, as it stands, there are no signs of a long-term bullish reversal. Therefore, it seems likely that BTC will be rejected again at these levels.

BTC/USDT 2 hour chart | Source: TradingView

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions

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