Bitcoin is seeing a tepid start to this week as neither the bulls nor the bears exert any pressure on the other. The cryptocurrency looks relatively calm in the low-volume season, as do the technical indicators. Market participants should refrain from excessive trading in such conditions. Bitcoin is currently trading at $421.53.
The technical indicators overlaid on the 4-h BTC-USD price chart from BITSTAMP are giving mixed signals. This, coupled with the lackluster price action, is compelling me to advise that this is a no-trade market, and one should wait for better opportunities to trade.
Chart Structure – As discussed in the previous bitcoin price technical analysis Watch These Resistances, the cryptocurrency has failed to overcome the selling pressure near the 20 4-h SMA. The updated value of this moving average is $424.7045.
Momentum – The Momentum reading of 2.4800 should not be taken as a bullish sign. Though positive, it is oscillating very close to the 0-mark and reflects the indecisiveness of this market.
Money Flow Index – Even as the price drops, the MFI is increasing in a divergent manner. An increasing MFI often causes a price appreciation. The latest value of 14 4-h MFI is 42.1813.
Relative Strength Index – The underlying strength remains weak and should be discomforting to the bulls. The latest value was seen at 40.2359.
We would be better off if we just followed what the market intends to say, and right now, it is telling us to stay on the sidelines until better trading opportunities arrive. With the market being quiet, it makes little sense to aggressively build positions.
Bitcoin may end 2015 near $440 as market participants are expected to cover their short positions in coming couple of sessions. Do not be lured by the short-covering rally to create long positions. Expect volatility to remain low.