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Bitcoin Price Analysis for 9/4/2015 – Bearish Continuation

This week, bitcoin found resistance around 262 and formed a head and shoulders with a neckline around 256. After the breakout, there was a period of consolidation, where we saw bulls fail to reach back to the shoulder level around 260. Instead, after a session of consolidation, price fell sharply during the April 8th session. As we enter the April 9th session, btcusd looks poised to continue a bearish trend.

Bitcoin (BTCUSD) 1H Chart April 9
btcusd april 9 1h chart
(click to enlarge)

The 1H chart shows that price fell sharply after confirming the head and shoulders top, it is now under the cluster of 200-, 100-, and 50-hour SMAs. Also, the 1H RSI dipped below 30, even 20, showing revival of bearish momentum. We do see some bullish divergence, but if the market is indeed in bearish continuation mode, this would not represent oversold condition, but simply confirm the bearish momentum.

The 4H chart shows that bitcoin has been consolidating since late March roughly between 235 and 262. Well, it was first between 235 and 255, but price broke above. The fact that this was a false bullish breakout is another signal for the bearish outlook, especially since the prevailing trend in March was bearish.

Bitcoin (BTCUSD) 4H Chart April 9
bitcoin 4h chart 4/9
(click to enlarge)

Now, bitcoin looks poised to test the 235 low again, with strong risk of breaking lower. Below 235, there is a common support around 210. Below 200, bitcoin would open up the low on the year around 166. In the daily chart, we can see that indeed, price has broken a rising trendline from January, and is now back under the 100-, and 50-day SMAs. When the daily RSI dips below 40, we would have another bearish sign because that would reflect the loss of bullish momentum at the beginning of the year into mid-March.

Bitcoin (BTCUSD) Daily Chart April 9
bitcoin daily chart april 9
(click to enlarge)

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