Bitcoin trading is currently correcting upwards in the price chart but the technical indication is that more downside is on the cards. Regardless, the current mood of negativity does not promote buying behavior, but its increased intensity, over the weekend, implies that a decline bottom may be near.
Bitcoin Price Analysis
Time of analysis: 04h21 UTC
BTC-China 1-Hour Chart
From the analysis pages of xbt.social, earlier today:
The correction near yesterday’s lows continues. The last wave down had caused RSI divergence, thereby, forcing price back up. Now, on making a lower high, RSI has reverse diverged to the start of the wave. Ordinarily, this is a signal that we can expect downside continuation, but as the price action in the chart shows, the market often compounds the divergence until all upside momentum is exhausted before slowly edging to the precipice again.
The same may happen at the present juncture. The stochastics (top) have not yet grouped in overbought territory; MACD (bottom) has more room to its upper Bollinger Band. Technically, the correction may continue and even push higher into the chart, with RSI (second from top) reverse diverging to the previous high near 1700 CNY ($268 – Bitfinex).
The decline should, eventually, continue lower. Our $252 target remains untouched and negative mood, in the Bitcoin ecosystem, is rampant.
Of course, we know that this is a correction to a larger advance and we will be on the lookout for signs of reversal to the upside. The first such confirmation will come when price trades above the green 20MA and red 200MA across exchange charts. Until then, the outlook – like the general mood – remains down.
Time of analysis: 15h30 UTC
Bitstamp 1-Hour Chart
The chart indications do not strongly bias expectation for direction and we have to remain patient for this negative period in Bitcoin’s history to resolve so the chart can move unimpeded again. In the current climate downside is favored, and it seems to assert itself more strongly during the US session.
While price trades below the red 200MA in the 1-hour chart, the outlook remains the same: sideways to down.
The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. – John Templeton
Bitcoin price, like all markets is governed by social mood. Buying occurs during times of positive and hopeful aspiration. Negativity and uncertainty, such as the current conflict around block size, and aggressive, divisive defiance encourages selling. With this in mind we retain a bearish outlook for the bitcoin price chart, although it may soon change as negative mood tends to peak around the market bottom. A technical confirmation of when trend has reversed is given above and we look for the market to complete the downside in the coming days or weeks and to give us the signal into advance.
Bitfinex orderbook depth and Buy/Sell Volume:
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Bitcoin price charts from TradingView.
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