Last week’s rally had been fast and furious, with a lot of burning rubber and little chart distance. As quickly as it had completed the last push toward $300, it gave up almost half of the progress in a sell-off. The bulls have cooled down somewhat and are now looking for shelter further down the hill.
Bitcoin Price Analysis
Time of analysis: 15h42 UTC
BTC-China 1-Hour Chart
From the analysis pages of xbt.social, earlier today:
Yesterday, price declined below a well-formed MA sell signal and crossed below the red Fib fan center line. Once price established below this chart feature the chart condition was 100% bearish, and the 1.618 Fib target opened up to the downside.
Prior to the move, MACD (top) had already formed, at the 15min timeframe, reverse divergence to the entire wave of advance – AND resolved it. Hence there was nothing in the 15min chart MACD indicator that could hinder decline.
RSI, similarly, had cleared a path to the downside. Just prior to the decline RSI resolved reverse divergence to a prior swing low -a sign of bearish continuation. The downside was wide open for decline and xbt.social took the trade.
During the course of today price had found support at the $260 and 1720 CNY level and now seems to be gearing up for the next leg of decline. A caveat is that price declines prior to 1-hour MACD (top) pushing above its zero line, which could potentially signal a return to the upside.
That cotton trade was almost the deal breaker for me. It was at that point that I said, ‘Mr. Stupid, why risk everything on one trade? Why not make your life a pursuit of happiness rather than pain?’ – Paul Tudor Jones
Until proven otherwise, expect price to decline to the red 200MA where it overlaps with a Fib line near $256 and 1670 CNY in the BTC-China chart. Further down, the 2.618 Fib extension at $250 and 1620 CNY may be a destination, although the 200MA should catch the initial decline.
Bitfinex orderbook depth and Buy/Sell Volume:
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