Bitcoin Price Technical Analysis for 21/8/2015 – Rebounds

Bitcoin has rebounded after taking support from the trendline discussed earlier. The price is now trading at $232.73, 1.79 percent higher than yesterday. The rebound of the past two sessions is erasing the losses for the week.

bitcoin price chart

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As the cryptocurrency heads into the weekend, things become even more interesting as a new range is expected to trap Bitcoin. I am expecting the level of $220 to continue playing as a support while the zone of $240-242 should act as an upside barrier to Bitcoin.

Technical analysis of the daily BTC-USD price chart has been presented below.

Bitcoin Chart Structure – Even as Bitcoin stages a short-covering-led bounce, there is a less probability of it immediately piercing the earlier consolidation zone of $240-242. The level of $220 has attracted buying interest repeatedly before, and until and unless that breaks decisively, market participants can safely go long on declines.

Fibonacci Retracements –The 76.4 percent Fibonacci retracement of $242.36 is expected to add additional pressure on the bulls.

Moving Average Convergence Divergence – The MACD and the Signal Line continue to crash unabated. The value of MACD has now hit -11.5507 while that of the Signal Line is -6.7442. The Histogram is now at -4.8066.

Momentum – After edging up before, the Momentum reading has taken a beating again. The value has dropped to -38.4200. This is despite the fact that the price has risen almost 2 percent.

Money Flow Index – The MFI is still indicating oversold levels with its reading of 16.3935.

Relative Strength Index – That the underlying strength is still feeble can be understood from the 14-day RSI value of 30.7455.

Conclusion

There is a simple strategy to be adopted in the present case. Buy low and sell high, but all by following stop-losses.

Market participants should create long positions when the price nears the support of $220-225 and create short positions when the price approaches the resistance of $240.

Maintain a risk-reward of 1:2.5 in trades.

Source

TheBitcoinNews.com – leading Bitcoin News source since 2012