- Bitcoin price continued to suffer, and there was a sharp downside move this past week.
- There are a couple of bearish trend lines formed on the hourly chart (data feed from Bitstamp), which are acting as a catalyst for the downside move.
- The price is hovering near $400, which must hold if the bulls have to prevent any additional weakness.
Bitcoin price was sold aggressively this past week. More losses are possible, but the $400 support area holds the key.
Bitcoin Price – Sell Rallies?
Bitcoin price traded down, and as highlighted in this past week’s analysis, the resistance area of $450 played well to push the price down. There was a sharp downside reaction, and the price moved closer to the $400 level. A new monthly low of $402 was formed where the bulls are putting up a fight to prevent any additional weakness.
There are a couple of bearish trend lines formed on the hourly chart (data feed from Bitstamp), which may play a crucial role if the price bounces from the current levels. The price is already correcting higher and broke the 23.6% Fib retracement level of the last drop from the $425 high to $402 low. However, the most important resistance area seems to be around the $415-20 area, as it acted as a support earlier and may act as a hurdle for the bulls moving ahead.
The 61.8% Fib retracement level of the last drop from the $425 high to $402 low is also around $415 level. A break above it might call for a test of the highlighted trend lines and resistance area. The price is also well below the 100 simple moving average (H4 chart), calling for more losses.
Looking at the technical indicators:
4-hours MACD – The MACD may change the slope to the bullish area, suggesting a correction moving ahead.
4-hours RSI (Relative Strength Index) – The hourly RSI is in the oversold area, matching the view of a correction.
Intraday Support Level – $400
Intraday Resistance Level – $420
Charts from Bitstamp; hosted by Trading View
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