Bitcoin Price Technical Analysis for 08/04/2016 – Bears Revving Up!

Bitcoin Price Key Highlights

  • Bitcoin price made a strong bounce after its sharp drop, reflecting a correction for sellers.
  • Price could pull up to the broken consolidation support or to the moving averages before resuming its drop.
  • The recent hack on a bitcoin exchange in Hong Kong has put downside pressure on prices.

Bitcoin price has exhibited strong bearish momentum but is in the middle of a retracement from its sharp downside move.

Technical Indicators Signals

The 100 SMA is below the longer-term 200 SMA, signifying that the path of least resistance is to the downside and that further losses are likely. In addition, the gap between the moving averages is widening to show that bearish pressure is getting stronger.

However, stochastic is heading north so bitcoin price could follow suit. In that case, price could keep pulling up higher, possibly until the dynamic resistance at the moving averages around $640-660, which is also within the vicinity of the broken symmetrical triangle support visible on the 4-hour time frame.

If these areas hold as a ceiling, bitcoin price could resume its drop to the spike down at $480 or much lower. On the other hand, a move past the $650 area could signal that bulls are staying in control and could push price much higher.

Bitcoin Price Technical Analysis for 08/04/2016 - Bears Revving Up!

Bitcoin Price Technical Analysis for 08/04/2016 - Bears Revving Up!

Market Events

Reports of a hack in a bitcoin exchange in Hong Kong have weighed on prices recently, as $72 million has allegedly been stolen. This marked the second security breach of a major bitcoin exchange, reviving concerns about the reliability of using and trading the cryptocurrency.

However, analysts have assured that this does not expose any weaknesses in the security of blockchain, which is the private ledger in which bitcoin transactions are updated and stored. Still, this incident was enough to send jitters among the investing community, leading many to dump their bitcoin holdings early in the week.

Moving forward, the attention could turn to the top-tier market events, namely the Bank of England’s interest rate decision and the U.S. non-farm payrolls release. Any change in policy could spur volatility in bitcoin price while upbeat jobs data from the U.S. economy could further boost the dollar against bitcoin.

Charts from SimpleFX

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