Bitcoin price printed a mediocre move during this week’s first two days of trading by reaching above $420 (Bitstamp). The move now looks to be keeling over, and we should see a small sell-off to local support.
Time of analysis: 14h00 UTC
From the analysis pages of xbt.social, earlier today:
Bitcoin price continued a choppy path higher during the past two days. Getting above $420 on a small surge on Monday raised expectations that the market may want to test the long-term overhead resistance line that is currently through $432 (straight up) in the Bitstamp chart.
However, today’s price action has printed a rounded top in the 1-hour chart and the pattern’s implication is a sell-off to nearby support at $410.
Notice that price has once again strained higher above the 200-period moving average (200MA, red) without making a higher high. During the past weeks, this pattern combination has typically resulted in price selling off to below the 200MA from where it would advance to it again.
The long-term trendlines (not shown) that have constrained price, from above and below, have converged to $432 and $410 in most BTC/USD charts.
The bitcoin price chart continues consolidating into a narrowing wedge/triangle pattern that will eventually see a breakout. The direction of breakout is ambiguous: fundamental and sentiment analysis argues that a sell-off is due; technical analysis implies a move to the upside. With bitcoin price rallies typically lasting only three weeks, a reward-halving rally – two months prior to the event – would be premature. Yet bitcoin price speculation has, in the past, ignited several fast-paced rallies with no discernible internal or external catalysts.
The tipping points for a trending breakout are the converging trendlines currently at $432 and $410 (Bitstamp).
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Bitcoin price charts from TradingView.
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