Bitcoin price attempted another shot at the 4-hour chart 200-period moving average today without success. The market lacks conviction and price should draw lower as a result.
Time of analysis: 14h00 UTC
From the analysis pages of xbt.social, earlier today:
Typical indicator behavior as per yesterday’s analysis: the price wave approached its top with MACD (top) touching its upper Bollinger Band and the stochastics (second from top) grouped at their upper maximum. Today’s bounce from the 20MA saw the momentum indicators diverge across the board – indicating trend exhaustion. Note how RSI (just above price) had diverged (magenta annotation) from the nominal new price high and forced price back below the green 20MA, thereby, breaking the ascending wave’s short tenure.
Let’s remain patient here. The wave up lacks participation, it is overbought and the momentum indicators show the strain with which advance had reached for the 4hr 200MA near $419 (Bitfinex).
Trade is difficult – as soon as the market achieves a short-term target it reverses – a sign of indecision and uncertainty.
As outlined yesterday, there is unlikely to be a trade opportunity until price either climbs above the 4hr 200MA or drops below the support floor just below $400.
Bitcoin price trading in a narrowing range. The current markers are ~$420 to the upside and ~$400 to the downside. A clean break above or below either will be our sign to trade. Usually, indicator signals herald the trend breakout hours or days before the market event. Even then, these allow us to set up our trade parameters, position size and strategic plan, but the trigger only gets pulled at the critical moment when breakout is confirmed by lagging indicators – believe it or not – so as to trade what you actually see in the chart, rather than trade what you think you’ll see.
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Bitcoin price charts from TradingView.
Image from Shutterstock.
Last modified: March 23, 2016 17:21 UTC