Bitcoin price is being rejected by the prevailing $680 support and resistance level. The outlook remains that a consolidation is underway – prior to lift-off, but we keep a weary bearish eye on critical support just below price.
Time of analysis: 13h30 UTC
From the analysis pages of xbt.social, earlier today:
Bitcoin price is again falling away from the $680 (Bitstamp) resistance level (horizontal, dark blue) after failing to advance above it since yesterday’s higher low.
The chart picture still fits the outlook of consolidation to $650 (horizontal pale blue) prior to a block reward halving rally. The magenta arrow in the 1hr chart above suggests that price is using this trendline for support before making a break to the upside.
However, we should remain alert to the possibility that additional decline can still happen. Sometimes market behavior is unexpected – or even irrational. Now that the majority are committed to long positions, some big players may decide to induce selling in order to buy from lower in the chart. Potential Bitstamp targets are $650, $600-$620 (horizontal green) and $560 (the previous low).
The initial signal of continuing decline will be evident from the familiar “breach” rule-of-thumb: if the market opens and closes a 4hr candle below $620 support (green), then the previous low near $560 becomes a likely target.
The prevailing assumption is that bitcoin price will advance at the block reward halving: either in anticipation of it or following the event. Of course, since the loss of my crystal ball, I can only speculate that other scenarios exist, such as price selling off to support, lower in the chart, prior to igniting into a large advance. There is, however, no technical signal that implies a large decline at the moment. Instead, a consolidation to the existing trendline (magenta) or $650 (Bitstamp) seems the game. A breach of $650 and then $620 will change the outlook from cautiously bullish to short-term bearish.
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Last modified: July 5, 2016 16:40 UTC