Bitcoin bulls are feeling the heat as profit booking and fresh selling continues to weigh on the price. My last analysis Bulls Giving Up? revealed that the appreciation of the US dollar following the announcement of the Federal Reserve regarding the first hike in interest rates was one of the reasons that are weighing on the Bitcoin market.
Another economic reason that will keep the Bitcoin prices depressed is the latest quarterly US GDP numbers. GDP rose at 2.3% in the second quarter and the first quarter numbers were revised upwards to a 0.6 percent advance, wiping out a previous reported contracted, accorded to Bloomberg. Better economic growth improves the prospects of a September rate hike.
Bitcoin is trading at $287.96, $1.77 or 0.61% lower than yesterday’s price.
Technically, things have turned slightly more bearish for Bitcoin and calls for creating short positions on rallies.
Bitcoin Chart Structure – The daily BTC-USD price chart above indicates that Bitcoin pierced the support level of $286 intraday before paring some losses. The price hit a low of $284.53, and I am expecting lower lows in the coming sessions.
Fibonacci Retracements – The 38.2% Fibonacci retracement of $280 will prove to be a near-term cushion for the price.
Moving Average Convergence Divergence – MACD has finally registered a bearish crossover with the Signal Line. The latest MACD, Signal Line and Histogram values are 6.4708, 6.8644 and -0.3936 respectively.
Momentum – The Momentum reading is relatively positive at 11.2000.
Money Flow Index – The MFI has surged to 73.1539 while the price heads lower. This divergence will ultimately lead to a deeper slide in Bitcoin price.
Relative Strength Index – The RSI has dropped slightly to 58.1084.
The strain on Bitcoin is palpable. Market participants should consider placing bearish bets on the cryptocurrency if and when the price nears the marked resistance level of $295. A close below $286 will lead to another 2% decline in the price.