Bitcoin price declined below 1hr chart support in early trade, today, after which price has been drawing sideways. At the time of writing it appears likely that another wave of decline is on the cards.
Time of analysis: 13h30 UTC
From the analysis pages of xbt.social, earlier today:
A section of the OKCoin 2Week chart we considered yesterday [at xbt.social].
The bulls have failed to pull price out of its corrective dive and price breached the supporting 1-hour 20-period moving average (20MA in green). Additionally, a full valid xbt.social signal is forming in the 15min chart.
Although a sell signal is expected, if the bulls take their lead from the gold chart, they could attack and a buy signal could result. As per the xbt.social trading philosophy, we do not try to predict the price movement but, instead, prepare for either outcome: buy or sell – the signal will prompt our action in the market.
The 1-hour chart’s stochastics (second from top) have hit their minimum and so has MACD – which has settled at its zero line (magenta arrow). It is a slight concern that the 1hr indicators are oversold at this juncture but a previous similar instance is circled in the left of the chart. In that case decline did continue.
We’re still assessing the structure of this turn down in wave A (or 1), so we cannot make large bets just yet. There is a much better trade waiting in wave 3, when we can expect simultaneous signals at multiple timeframes. A trade recommendation has been issued for the current wave of decline which should be bumpy and of limited distance. Given the early stage of decline and higher risk of reversal, traders should only use a quarter position size and a tight stop-loss.
Buy-and Hold-speculators should wait for the next sell signal (in wave 3) before changing allocation from neutral (50:50).
The bitcoin price chart shows indications that favor continuing decline, although confidence is still low so close to the top of the advance. Price action at wave turnings can often extend to a new price extreme as the market adjusts to accept reversal. Although decline seems likely, the bulls can spring another wave to the upside, so refrain from betting too big at the moment. Better trade opportunities await when the direction of trend is confirmed.
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Bitcoin price charts from TradingView.
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