Bitcoin price decline reversed at $380 (Bitstamp), yesterday, and is currently running into upside resistance. It is still too soon after the last strong wave down to confidently call the next move, and analysis suggests staying out of the market until the present chart indications resolve.
Bitcoin Price Analysis
Time of analysis: 10h30 UTC
Bitstamp 4-Hour Chart
From the analysis pages of xbt.social, earlier today:
Bitstamp 4hr chart on the left and a 1hr chart on the right
The xbt.social trade recommendation from $433 (Bitstamp) is now closed, since its dynamic stop loss was triggered when price returned to the 4-hour 200MA a few minutes ago. The closing price was Bitstamp $404.
Last night’s drop below the 4-hour 200MA was fast and determined and hit exactly to the lower Fib line target (blue circle) identified in yesterday’s analysis. Price has now bounced back to the 4-hour 200MA and what happens next at this juncture will be interesting.
The 20-period moving average (20MA, green) and price is converging on the level of the red 200MA. Judging from the diverged stochastics (top panel, notice the blue dots indicating downside regular divergence), as well as the over-sold state of both stochastics and MACD (panel just above price), we’d expect price to now react to the upside. But RSI has reverse diverged to a previous high (magenta annotation, third panel from top) and price is pressed up against the resistance of the 4-hour 200MA. So, strong (but opposing) forces are acting on price in the 4hr chart and we should wait to see how the market navigates this high-pressure condition.
The 1-hour chart (not shown) has RSI reverse diverged to a previous high, and if price continues higher, RSI will reverse diverge to the top of the previous correction (pointed out by a magenta arrow in the chart, above). The indications in the 1-hour chart favor reversal back to the downside. Will a reversal see decline to a new low? It’s difficult to say – we might see a larger sideways correction form above the Fib line that halted decline yesterday.
Bitcoin price decline has found support near $380 (Bitstamp). The current reversal may see price work its way higher in the chart – for now, apparently in correction only. Traders should wait for opposing indications to play out before the direction of the next move will become clear.
Bitfinex Depth Chart and Buy/Sell Volume
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Bitcoin price charts from TradingView.
Image from Shutterstock.