The choppiness in the Bitcoin market is testing the patience and the wit of the trading community. While many traders are still hopeful of Bitcoin reaching $245, fears are beginning to gain ground that this choppiness is unhealthy and may derail the ongoing bullish attempt.
Yesterday, as Bitcoin struggled to safeguard the accumulated gains, the price dropped to $235 in quick time. Even now, Bitcoin is trading lower at $237.60.
In yesterday’s price analysis Sluggish on the Upside, we discussed how the technical indications had improved substantially for the cryptocurrency, and today, we will revisit them for any changes or divergences.
Bitcoin Chart Structure – The daily BTC-USD price chart above clearly tells us that Bitcoin is prolonging its stay inside the price range (marked in the yellow) of $225-245. The action is weak from both the bulls and the bears, which is leading to an extended consolidation. Bitcoin is presently being supported by the 30-day SMA of $233.5060.
Moving Average Convergence Divergence – As price dips, the weakness is reflected in Histogram as well. Its current value is 1.4986. On a positive note, MACD and Signal Line register better readings of -0.1465 and -1.6451 respectively.
Momentum – The Momentum reading is slightly negative relative to yesterday’s value, however, still positive at 7.4400.
Money Flow Index – In a big departure, the MFI advances to 67.8898 even as choppiness and indecision plagues the market.
Relative Strength Index – Expectedly, the 14-day RSI value has eased to 53.9922.
It is very hard to predict when the market will confidently choose a direction and be done with the choppy action, but it can be recommended that the mentioned technical levels – support and resistance – should be used to create trading positions.
Create short positions if and when the market reaches the resistance level by placing a tight stop-loss above the 200-day SMA of $246.8122.