Bitcoin price pushed above $450 and 2900 CNY overnight and at the time of writing is retesting a resistance level it pushed through to make the new high.
Bitcoin Price Analysis
Time of analysis: 14h00 UTC
OKCoin BTC/USD 4-Hour Chart
From the analysis pages of xbt.social, earlier today:
The 4-hour OKCoin chart shows price falling back to a Fib line that originates at the November closing high.
If price can close the current daily candle above this line then the resistance level will have been shown to provide support and the advance could continue higher and possibly accelerate.
This will be a suitable condition upon which to build a long position, provided the momentum indicators confirm additional advance in the 1-day and 4-hour charts. At the moment the 4-hour indicators are diverged to the upside, as indicated by the magenta annotations above price and the diverged RSI indicator.
However, if the rally has legs, then we could expect the divergence to compound – as illustrated by the blue annotations to the previous advance. Notice the behavior of the stochastics (top) that has been highlighted with circles. Although, the 4-hour stochastics should now decline to their minimum and drag price down with them, they can still rapidly return to advance if the advance picks up pace.
Price has fallen into a correction after pushing above $450 and 2900 CNY overnight. How deep the correction may pull lower remains to be seen but for advance to continue it is important that price hold above the Fib line near $450 and 2900 CNY.
If a 4-hour candle opens and closes below the 4-hour 20-period moving average (green) then a larger decline may set in. If today’s daily candle closes below $450 it would imply either a consolidation below $450 – before pushing higher – or, more severely, a return to where this advance began from in the low $400s.
Bitfinex Depth Chart and Buy/Sell Volume
What do readers think? Please comment below.
Readers can follow Bitcoin price analysis updates every day on CCN.LA. A Global Economic Outlook report is published every Monday.
The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.
Bitcoin price charts from TradingView.
Image from Shutterstock.