Bitcoin has been consolidating over the weekend following a bearish swing last week from about 262 down to 230. Then, price started to consolidate between the 230 low and a high around 240. The 1H chart shows the small range where price is now hugging the 50-hour SMA. With the 100-, and 200-hour SMAs still above, sloping down, and in bearish alignment, bitcoin maintains a bearish bias within the consolidation.
Bearish Scenario is Favored: Furthermore, the RSI remained under 60, which reflects maintenance of the bearish momentum. The favored scenario is therefore a bearish continuation. A break below 230 would extend the current downtrend in the short to medium-term, down to the 210 support. Then, if price breaks below 200, the 166 low on the year will come into play.
Now, if price pushes above 240, the market is neutralized and there is a bullish outlook in the short-term with the 260-262 resistance back in sight. In the 4H chart, we can see that around the psychological level of 250, there is a support/resistance pivot that might act as resistance against a pullback so monitor this area first. If price can start holding above 240, then the 250 resistance will become more vulnerable.
This will be a key resistance. A break of 265 for example suggests that traders are still not ready for bearish continuation and wants to continue the consolidation mode. Within this consolidation mode, there would be some upside risk in the short to medium-term towards the 300-310 highs with risk of clearing this high.
However, we should be reminded that the prevailing trend is still bearish since 2014, so if this bullish correction does push above 310, we should monitor the 321, high on the year for resistance.
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