The bitcoin price chart is slumping and a potential drop lower edges to the edge of support. Even as a long-term $1,750 swirled in the tea leaves, yesterday, we can see a tea-tree ladder with rungs at $600, $560, and $500.
Time of analysis: 11h00 UTC
From the analysis pages of xbt.social, earlier today:
We currently see price testing its 20MA (green) and the top of a support zone (orange) around $640 (Bitstamp).
If decline continues then we would expect price to decline into the support area amidst hesitant market behavior. By the same token, the market may surprise us by just selling straight through the zone, but let’s anticipate a struggle in this chart area and only enter once the support has been decisively broken.
A sell entry below $634 (inside the support zone) would be an opportune moment to open a position.
If price sells through support then reasonable targets would be at the 200MA (red) level of $600, and near the previous low of $560. If $560 and $550 both give way then the $500 psych level beckons.
An alternative – short-term bullish – scenario is that support might hold and that another upside wave to above $700 can unfold in a Sunday rally or an end-of-month-Monday-morning-salary-buying spree. We don’t currently have a signal for such an outcome but we’ll watch out for this scenario.
Since bitcoin price remains below the 1-day chart’s 20MA, speculators should consider a funds allocation of 40:60 BTC vs fiat until we see a confirmation of a return to uptrend. Margin traders should remain patient for today’s signal to become glaringly obvious before committing to a sell position. The bulls have much confidence due to the assumption that Friday’s Brexit outcome is a bullish signal that will keep the chart advancing. We saw from yesterday’s long-term analysis that this is not the case.
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Bitcoin price charts from TradingView.
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