Bitcoin price holds a sideways course since the $550 high, and a brief advancing wave has paused at the time of writing. Some bearish technical indications are evident in the chart, but be cautious of selling just yet.
Time of analysis: 14h00 UTC
From the analysis pages of xbt.social, earlier today:
Bitcoin price made a run for the upside during the hours prior to this analysis report. As we can see from the various magenta annotations in the chart, the move has caused divergence in various indicators and there are technical reasons to believe that price will turn down – even if it is just briefly. There is a caveat and it will be pointed out after looking at the (short-term) bearish indicator signals.
1) The stochastic oscillator (top) has its two stochastics grouped at maximum while also diverging to price. Stochastic divergence is indicated by the red dots, circled in magenta. Notice that this configuration had been followed by a downward correction on each prior instance visible in the chart. However, it must be pointed out that MACD (just above price) had also flashed divergence in concurrence with the stochastics in previous instances, while MACD is currently not diverged.
2) RSI has reverse diverged to the upside: RSI had made a higher high compared to the recent top near $550, but price has only made a lower high. This instance of reverse divergence is bearish and should see price turn back down.
3) MACD is turning back below its signal line, as well as its upper Bollinger Band. This is a bearish signal, but also brings us to the caveat mentioned above. A similar MACD configuration occurred at the blue arrow in the far left of the chart. In that case, the stochastics were diverged, RSI showed regular divergence to the new high, and MACD, similarly, was busy turning down, yet, price only made a shallow correction before pushing higher.
Bearish as the 15min indicators are, there is not yet sufficient reason to believe that advance will not resume after a sideways correction. Only by price falling below its 200MA (red), and MACD crossing below its zero line will we have reason to actually trade a move toward $500. Confirmation of such a decline should also be evident in the 1hr chart’s indicators.
Bitcoin price tried the upside, today, but went too far too soon. A correction may see price simply resume advance, while correction below $530 could topple the chart into test of $500. The advance has visibly lost momentum, but this has never stopped bitcoin price from catching a second wind.
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Bitcoin price charts from TradingView.
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Last modified (UTC): June 1, 2016 17:30