Bitcoin Price Declines Below Critical Support

Bitcoin price has fallen below the critical support level currently at $261 and 1624 CNY. Analysis looks at potential downside targets.

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Bitcoin Price Analysis

Time of analysis: 05h54 UTC

Bitstamp 1-Hour Chart

Bitstamp 1-Hour Chart

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

Price is retesting the $261 / 1624 CNY level from below.

Analysis stands as per yesterday's last update:

Price should correct higher (perhaps to above the green 20MA) before heading down to the red 200MA and causing divergence in the stochastics and/or MACD.

Should price not decline all the way to the 200MA, and a buy signal forms, as happened on the 13th then we’ll enter long on such a signal.

At the time of writing price is retesting the critical resistance level at $261 and 1624 CNY.

If the expected scenario unfolds, whereby price continues correction to the red 200MA, then it should soon head down to $250 (Bitstamp/Bitfinex) and 1550 CNY (BTC-China). This scenario may be negated by the MA buy signal currently showing in the 15-min chart. However, that signal is not convincing until we see advance above critical resistance ($261 / 1624 CNY).

Let's observe.

BTC-e Namecoin 1-Day Chart

Selection_999(1353)

The Namecoin 1-Day chart is flashing divergence (see magenta annotations), so a pull-back could be expected.

However, notice the strong moving average (MA) buy signal from a strong base and compare how NMC made a lower low during April when BTC was being strongly bought at its support floor. The implication is that a bottom is in.

Before buying NMC it would be best to wait and see what the Bitcoin chart does next – a correction lower may give buyers a better long-term entry.

Conclusion: do not buy NMC just yet. Wait for a clear direction from the Bitcoin chart, today, or in the coming days.

Life is and will ever remain an equation incapable of solution, but it contains certain known factors. - Nikola Tesla

Summary

The advancing Bitcoin price of the past few weeks had spurred a lot of excitement for a new rally. This expectation is plausible, but even were this the start of a large rally the initial waves are likely to engage in frequent corrections until the rally gains momentum. Current price action conforms to this view and a likely target for the current correction lies at the 1-hour 200MA near $250 (Bitstamp) and 1550 CNY (BTC-China).

Bitfinex orderbook depth and Buy/Sell Volume:

 Bitfinex depth buysell volume 11h04 020715

Click here for the CCN.LA interactive price chart.

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.

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About the author

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Venzen Khaosan

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.

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