Price as of writing is US$249.90
Last week it was stated:
“As the above chart shows, the price has broke above the 50 day EMA, which could set up for a move to test big resistance in the US$255-$260 range.”
The Price has not only broken through the 50 day EMA, but has now moved above the 100 day EMA as well. A test of the 200 day at ~US$256 should occur. However, a lot of energy has been spent and the RSI is getting near an oversold level. It’s looking more like it will reject a move above the key US$255-$260 level, at least initially. Below is a daily chart of the bitcoin price.
As both volume and OBV are showing, there has been rising volume in recent months and as was pointed out in last weeks article, one of the big reasons for this has been wash trading.
So far this has been a self fulfilling prophecy of bullishness as price has lifted with both volume and the OBV. The major problem however, is that while price has risen it has been rather modest on what is much higher than average volume for bitcoin compared to normal levels.
At the same time the RSI is bullish, but reaching toward an oversold level, which it will certainly hit if we test resistance at US$255-$260 very soon. This will probably lead to a rejection of this area, and if this happens it will be time to determine if it’s a consolidation before a move higher or a bigger downside move.
The Bollinger Bands remain tight so one should expect price movement and some volatility to come back into the price. Obviously breaking through resistance would be bullish and could lead to a test of the US$300 area. As has been stated before: volume does precede price and the Bollinger Bands are confirming this.
Expect a sharp move soon.
Other indicators are also looking bullish: MACD and Directional Movement. MACD is nothing to get excited about, though as noted above price momentum has not moved very far here. Buying Pressure is above Selling Pressure and above the Directional Movement Index (DMI) line.
The Ichimoku Chart is also showing price headed into resistance. Right now it is at the top of the cloud. There has been a bullish crossover of the Tenken Sen over the Kijun Sen lines as well.
Most indicators are bullish here so expect a test of that big resistance area mentioned above. Once there, expect a rejection. The US$240 and US$233 areas should act as support on an initial downturn. How price acts after that will determine the next move.
Did you enjoy this article? You may also be interested in reading these ones
- Will Bitcoin-Friendly Voat.co Replace Reddit?
- BitPay Reveals the (Good) Reason Why Bitcoin Price Is Down
- This Week’s Bit Pics: Crypto Time Capsule, $1000 Tip, Bits on the Strip