Bitcoin price took a break from decline, today, and has traded sideways-to-up in a correction. The outlook remains bearish.
Time of analysis: 13h30 UTC
From the analysis pages of xbt.social, earlier today:
During the past week we have seen a support floor develop near $370 and 2450 CNY. The market traded price up in an ABC correction from this floor – implying additional decline – and yesterday’s analysis asked whether or not the support floor can be expected to hold.
Today, saw the development of the upward correction anticipated in yesterday’s analysis. We know that today’s small rising price wave is corrective because of its context immediately following the upside correction that started last Thursday.
A bearish lookout for the bitcoin price chart is supported by the following:
1) The repetition of the corrective price pattern, mentioned above
2) Price is trading below its key moving averages (MAs) amidst a generally slumping alignment of MAs in the 1day chart
3) No convincing technical indication that price is oversold, such as downside regular divergence in the 1day or 4hr indicators.
Yesterday’s analysis looked at the 4hr and 1hr charts and their MA alignments are both biased to a bearish outlook. Despite a sluggish – but valid – xbt.social buy signal in the 1hr chart for this recent upside wave, the bulls have failed to capitulate and ride the momentum higher. This implies that the bears are in control.
Can the bulls defend the past week’s support floor against selling pressure? Well, they have not been able to do hold a level since mid-December when price started printing lower lows on each of 5 large sell-offs. Additionally, the bulls have not achieved a higher high since Dec 12 – every push higher since then has been a successively lower high.
Bitcoin price is currently engaged in another upward price correction. The overall outlook remains bearish. Until we see evidence to the contrary we would fare best in this market to assume that trend remains down until proven otherwise. Dropping below the support level that had developed during the past week will open decline to targets $320 (Bitstamp) and 2100 CNY.
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Bitcoin price charts from TradingView.
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