Bitcoin seems to have stalled below the resistance we have been talking about. After a strong bullish action a day before, Bitcoin spent the day in a thin range of $292-297 and is now trading at $294.10, down $1.66 or 0.56 percent. The technical indications remain highly positive.
What worries me is that, if the ongoing struggle continues for too long, then the probability of bulls winning another round reduces drastically.
Take a look at the technical picture of the daily BTC-USD price chart below.
Bitcoin Chart Structure – It has been 5 straight sessions that Bitcoin has traded close to the upward sloping resistance and has been unable to pierce it. Generally, when after repeated attempts, the resistance is not breached, it takes the form of a distribution pattern and eventually a fall.
Fibonacci Retracements – The 76.4 percent Fibonacci retracement level of $295 is proving to be another pressure point for Bitcoin.
Moving Average Convergence Divergence – The MACD stays above the Signal Line with value of the former being 7.6881 and that of the latter being 6.9472. The latest value of the Histogram is 0.7409.
Momentum – Even while the price stalls, the Momentum reading has strengthened to 18.6300.
Money Flow Index – The MFI has extended its rally for the third day, rising to 65.2961.
Relative Strength Index – The RSI value is relatively flat on a daily basis; the latest reading is 64.8443.
The crux of today’s analysis is that while the whole picture remains fairly bullish, bulls must not waste too much time below the resistance. They should improve their efforts to cross the hurdle first, and then sustain above it.
Adopt a Buy on Dips strategy in Bitcoin. Aggressive traders can also consider shorting it for small profits. For both long and short trades, try to follow a risk-reward ratio of 1:2.5 or more.