Bitcoin price has, during the past three days, formed a series of lower highs and higher lows in a pattern that resembles the consolidation prior to a decline. There are technical indications that a pull lower is on the cards, but it may not get far.
Time of analysis: 15h00 UTC
From the analysis pages of xbt.social, earlier today:
The Bitfinex 1-hour chart shows the decline since the early November top just above $500.
On the way down price negotiated a series of Fib lines emanating from previous price reversal points during 2015.
With many of price’s indicators now in decline, there is a chance that price may head lower. How low remains to be seen, and an immediate target is the previous low at $300 (blue arrow) and 1800 CNY.
MACD (top) is edging below its zero-line and its Bollinger Bands are constricted – as usually happens prior to a directional move. With the stochastics (second from top) settling on their lower boundary, and RSI heading down with no divergence hampering its descent, the downside is open for sellers to take advantage of this opportunity.
Time is your friend; impulse is your enemy. – Jack Bogle
Should decline commence, it may not be a sustained downtrend, but merely a corrective drop to the previous decline low at $300 (Bitstamp) and 1800 CNY, so be prepared to take profit at those levels. Once there the direction of trend can be re-assessed.
Bitfinex orderbook depth and Buy/Sell Volume:
What do readers think? Please comment below.
Readers can follow Bitcoin price analysis updates every day on CCN.LA. A Global Economic Outlook report is published every Monday.
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.