The Bitcoin markets were in for a rude shock in yesterday’s trading session as the price plummeted from $264 to $242, losing more than 8% intraday. The sellers have booked partial profits which helped the price recuperate to $246.88.
However, the negative price movement should not have come as a shock to my readers as I have been repeatedly emphasizing that Bitcoin may hit $230 in the medium term. And the recent collapse has only strengthened my belief.
Given that a major move has happened in Bitcoin price, it becomes imperative to revisit the technical indicators. An analysis of the 240-minute, BTC/USD price chart has therefore been presented here.
Chart Structure – Breaking below the upward sloping trendline has turned out be murky for the cryptocurrency. The current value of $246 also coincides with the support level seen at the beginning of this month (check the price chart above). Even as I say that the digital currency may consolidate at present levels or even stage a rebound, I still expect the price target of $230 to be achieved in the next 7-10 sessions.
Moving Average Convergence Divergence – Thanks to the big correction, the MACD value, the Signal Line, and the Histogram value are now plunging into the red region. MACD is now at -4.9891, Signal Line is at -2.5598, and the Histogram value is at -2.4293. Failure to bring the MACD and Signal Line in the positive territory can have serious negative implications for the bulls.
Momentum – The Momentum indicator has also undergone a massive depreciation from north of 0 to -18.9000.
Relative Strength Index – Following the slump, the RSI value dipped into the oversold region, although only for a brief moment. The RSI reading of 32.8715 signifies that bears continue to have a major hold.
I reiterate that rebounds be used to exit the long positions and initiate fresh shorts with strict stop losses.