Bitcoin Price Technical Analysis for 22/7/2015 – The Alarming Momentum Crash

In my previous analysis titled Wide Divergences, I had pointed out some eerie disconnects between the Bitcoin price action and the technical indications. It is highly possible that the price eased a little in order to properly reflect the underlying technical considerations.

Bitcoin is currently trading down 1.32% at $275.99.

bitcoin price chartbitcoin price chart

Image: https://www.tradingview.com/x/WvyKtSo2/

However, I am very concerned about the incessant crash in the momentum reading, which is worsening by the day. A decline in the momentum value in flat trading cannot bode well for the long holders.

Read below the technical observations of the daily BTC-USD price chart.

Bitcoin Chart Structure – Bitcoin’s latest attempt at scaling the highs was nullified by a strong selling pressure. The price slipped from a peak of $281 to hit a low of $275, thereby extending the sideways movement.

Moving Average Convergence Divergence – There is no respite in the MACD and Signal Line readings as well. MACD has prolonged its losing streak to the ninth straight day with the value dropping to 6.4500. The Signal Line has eased to 9.8195, keeping the Histogram in the negative with a value of -3.3694.

Momentum – What’s most worrisome is the continuous decline in the Momentum reading when the price is sustaining comfortably near the resistance. The Bitcoin price has remained relatively same for the past 5 sessions, but the Momentum has nosedived from 13.9200 to -34.5600.

Money Flow Index – The latest MFI value is 47.0825.

Relative Strength Index – The RSI reading of 53.8095 does not add much value to our observation.

Conclusion

Negative Momentum readings are indicative of the lingering bearishness in Bitcoin, and with the momentum loss accelerating, it is best not to stay bullish or go long in the trade. Continue to remain short by placing a stop-loss above the resistance. Aggressive positions should be created only after the support has been breached.

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