Bitcoin price fell through $440 (Bitstamp) and has subsequently pushed back above this initial decline target level. The market has found support but today’s retracement lacks bounce.
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Bitcoin Price Analysis
Time of analysis: 14h00 UTC
Bitstamp 4-Hour Candle Chart
From the analysis pages of xbt.social, earlier today:
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A high concentration of bearish signals occurred at the opening of the 4-hour candle pointed out by the magenta arrow, and opened a high-leverage trade as price declined rapidly to below our xbt.social target of $440.
An important condition for entry was that a 4-hour candle both opened and closed below the 200MA (red). Subsequently, MACD (panel above price) dropped below its lower Bollinger Band (while below the MACD signal line) and smaller timeframes gave similar, confirmatory sell signals.
Price reacted to a powerful support line in the form of a rising Fib line (grey) originating at the January 2015 low. The market could grapple with this level or may find support for another upside attempt.
However, the sense is that price could continue decline below this support line if the market’s primary target is the 1-day 200MA currently at $413 in the Bitstamp chart. Price has not touched its 1-day 200MA for over 7 months and reversion to the mean is a strong force in any price chart, as it is in most cyclical phenomena. Additionally, if price continues the declining journey it is likely that it may overshoot its target to the downside.
The xbt.social trading plan objective is not to aggressively trade the downside – caution is paramount since a bullish resurgence could set in at any moment. Our objective is to buy actual (non-leveraged) bitcoin at cheaper prices.
Summary
Bitcoin price has declined to long-term support and looks set to continue lower toward the 1-day 200MA near $413 (Bitstamp). Traders should retain funds allocation near 30:70 BTC vs fiat. Bitcoin price is declining just as the US dollar is surging higher. Once a convincing set of buy signals show in the 1-hour and 4-hour charts, we will turn our focus back toward the upside and $470.
The article about price and fundamentals, promised yesterday, has been drafted and will be published over the weekend.
Bitfinex Depth Chart and Buy/Sell Volume
Click here for the CCN.LA interactive bitcoin-price chart.
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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.
