The Bitcoin price chart had been in a bearish configuration for several days and the decline was not capitulating. Around 12h00 UTC, today, the bottom fell out and Bitcoin resumes decline.
From the analysis pages of xbt.social, earlier today:
The 4-hour timeframe shows the chart condition, whereby, price had declined below both the 20MA and 200MA but did not plunge immediately.
A fake-out to the upside, earlier today, looked like it would repeat a similar upside punch as price made on 20 July. After stalling against the 20MA for a few hours, the surprise drop activated our prepared downside scenario Trade Recommendation, and here we are midway to our target of $257.
Drawing more lines on this chart would just add visual noise to an already busy picture, but a missing annotation is horizontal support and resistance around $252. This level represents a more likely downside target and intersects with the next lower rising Fib fan line on August 11.
The market will probably deal with the new downside reality by correcting sideways at present levels. MACD (bottom) is signaling divergence and RSI (above) is touching its lower Bollinger Band. Our dynamic stop loss from the 1-hour chart is in force and we may lock in profit somewhere along the Fib fan line immediately below price before re-entering trend for the next wave down – if this turns out to be signaled in the chart.
Yesterday’s NFP data release (215k) was below expectation ($222), but the figure was not too low to cause market disappointment. Hence, few market shifts occurred and the uneasy wait for September, and the Fed’s rate decision, continues. [Apparently, not so in the Bitcoin chart.]
No profession requires more hard work, intelligence, patience, and mental discipline than successful speculation. – Robert Rhea
There are several targets below price in the chart: $250 and $230 being the major candidates. Price may target the mid-$250s (Bitfinex), as discussed above, before pushing higher in either correction or a trend reversal. For now we keep our sights focused on the $250s.
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.