Bitcoin Price Support May Be Temporary

The bitcoin price decline halted at the BTCC 4-hour 200-period moving average. The market has spent most of the day milling around this area in the chart and, unless there is a surprise development, seems destined to resume decline.

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Bitcoin Price Analysis

Time of analysis: 13h00 UTC

BTCC 4-Hour Chart

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From the analysis pages of xbt.social, earlier today:

The 4-hour chart above highlights instances where decline had either struck a low or continued lower during downtrending price waves. The indicator being considered is a custom grouped indicator consisting of a fast and slow stochastic indicator.

Notice that, during a downtrend, price does not stop declining until both the fast and slow stochastics have reached their lower value extreme (zero).

The implication is that we will still see price decline below the current 200MA security blanket, since the slower stochastic is several hours from bottoming out.

Below the current area of price action there are targets at 2200 CNY and $340 (Bitstamp). If the red 200MA gives way price should head for the aforementioned target, but may decline much lower. In the absence of clear trade signals we cannot be sure where decline will find a bottom – presumably $300 will serve as strong support, although a return to the mid $200s cannot be ruled out.

Summary

Bitcoin price decline is difficult to trade wave by wave. Bitcoin corrective decline even more so. It’s onset is sudden and is rarely heralded by the indicators. The prudent course of action is to wait for a base to form and to trade when obvious opportunities start signaling across all timeframes.

Bitfinex Depth Chart and Buy/Sell Volume

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Click here for the CCN.LA interactive bitcoin price chart.

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Disclaimer

The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.

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