After being sold, during late US trading on Friday, to a trendline that has provided support since the middle of March bitcoin price is straining higher, early Sunday.
Bitcoin Price Analysis
Time of analysis: 00h00 UTC
Bitstamp 4-Hour Chart
From the analysis pages of xbt.social, earlier today:
The supporting trendline (blue) approximately overlaps a long-term Fib line that originates at the January 2015 low (not shown).
Any decline below this trendline will herald a larger decline. Price may poke below it, but what we want to see is a 1-hour candle open below the trendline, as well as, close below it. This is the typical sign that market traders look for to confirm that a supporting level (or chart feature) has been breached. However, the bitcoin market is less methodical and may just drop away below the level without pausing for confirmation.
The 4-hour chart shows that the stochastics have descended to their minimum and RSI has reverse diverged to the previous low. This combination of indications confirms the current push higher. For now it appears to be an upward correction, hence the strain, but if the market can buy price back above the 4-hour 20-period moving average (green), then the prior sideways grind can continue.
Bitcoin price dropped lower in what we can only assume to be a local corrective wave. Climbing above $420 today would imply ongoing sideways consolidation and a potential attempt on upside resistance at $432. However, if the bears grasp their chance and breach the support level at $410, then there is an opportunity to trade a larger decline into the mid $300s.
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.