Bitcoin Price Approaching Overhead Resistance

Journalist:
Venzen Khaosan @venzen
April 12, 2016

Bitcoin price eeks it out in a narrow range. Some lows, some highs but none of them to a new extreme. The eventual direction of trend remains unclear.

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Bitcoin Price Analysis

Time of analysis: 14h30 UTC

Bitstamp 1-Hour Chart

From the analysis pages of xbt.social, earlier today:

Vigorous upside, today, is approaching an overhead resistance zone that has held back advance since late 2015.

Although the latest advance is overbought and diverging, the push higher may have another upside wave in store. Bear in mind that it is not the right moment to bet long just yet. We want to see price establish above the long-term resistance near $432 (Bitstamp) before we consider a buy position.

Both the 4-hour (not shown) and 1-hour chart (above) have their stochastics grouped at maximum and flashing red divergence signals. Similarly, both charts’, MACD has reached its upper Bollinger Band.

1-hour RSI is diverging to a previous price high (magenta annotation), while another push higher will cause RSI to reverse diverge from a previous price high (blue arrow). The 4-hour chart’s RSI should show the same reverse divergence to the same price peak.

Summary

Our tipping points remain at $432 and $406 in the Bitstamp chart. There is a lot of energy in the current push higher, so it may continue to $432 after a downward correction. Let’s wait for a breach of $432 (approx. $8 above the current price level) for confirmation.

The alternative scenario is that price reverses at or below $432 and returns to the vicinity of $420 and continues the sideways consolidation. Even though the scenario of a larger decline is out of focus, for now, it cannot be ruled out until we see price above long-term resistance.

Bitfinex Depth Chart and Buy/Sell Volume

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What do readers think? Please comment below.

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Disclaimer

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.

Last modified (UTC): April 12, 2016 18:05

Venzen Khaosan @venzen

Market analyst and Open source developer with a keen interest in blockchain technology, consensus mechanisms and the decentralizing effect. He has found a solution to the PKI mechanism. Email me to discuss.