Bitcoin price has made little progress during the past week and the market is falling away from $600 (Bitstamp). The depth of the downward correction is uncertain and we look for potential support levels.
Time of analysis: 14h30 UTC
From the analysis pages of xbt.social, earlier today:
The 1-hour 200MA (red) comes back into focus as price falls away from $600 and below a trendline (grey) that has supported advance until last night.
The trendline draws similarly in most of the USD exchange charts but had been breached on Sunday in the CNY charts. However, the position of price below this trendline is not yet a definitive bearish signal.
A clearer bellwether of downward correction is the 200MA and in the Bitstamp chart this moving average is currently at $555. If the market can keep price above this level then we may see the next attempt on $600 and ongoing advance.
The 1-hour chart indicators imply additional decline, at the moment, but do support the notion that the 200MA can catch this decline. The stochastics (top, magenta circle) have yet to group at their minimum. RSI has reverse diverged to the very bottom of the base wave that preceded this advance, thus, implying imminent reversal. MACD has dropped below its zero line, but has typically reversed at its lower Bollinger Band (orange arrow).
Traders should therefore watch price action around the 1-hour 200MA, and buy-and-hold speculators should expect lower lows if both 200MA support (at $555) as well as $550 (Bitstamp) is breached.
Bitcoin price has strained higher during the past week and we now see the market backing away from $600. Whether this is a pullback to foster renewed momentum, or a larger correction to support remains to be seen based on the 1hr chart’s 200MA as well as $550 (Bitstamp) support and resistance level. If the correction will pull deeper, $500 and even $470 could be targets.
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Bitcoin price charts from TradingView.
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