In my previous Bitcoin price technical analysis First Conclusive Sign of Breakdown?, we discussed how the cryptocurrency was being pressured below its near-term support but also advised the market participants to wait for a close below $220 for a more reliable confirmation.
As can be seen, even though Bitcoin closed below its support level, it did not violate the strong floor provided by $220 and has instead jumped up to $230.36. And this is not the end of it. The cryptocurrency has managed to cross two major trendline hurdles and is making repeated attempts to head higher.
Let us discuss each aspect one by one below.
Bitcoin Chart Structure – The daily BTC-USD price chart above clearly tells that Bitcoin staged a false breakout but a stronger confirmation would have been the breach of $220 as stated several times earlier. Now on the rebound, Bitcoin has crossed the previous horizontal support and the downward sloping resistance line. Both the trendlines hold high significance as they had been tested on numerous occasions. Bitcoin is trading above both of them now.
Moving Averages – At $230.36, Bitcoin is in the midst of two important simple moving averages – the 12-day SMA of $229.9617 and the 30-day SMA of $231.9500. Sustenance above this couple of resistances will provide impetus to the bulls.
Money Flow Index – The MFI is gaining along with the price; the value is 48.2548.
Moving Average Convergence Divergence – That the current tussle between the bulls and the bears is a tight one is also reflected by the value of Histogram. The latest value of Histogram is 0.2775 as the Signal Line remains just a tad below the MACD.
Market participants are advised to adopt a wait and watch approach for now. Do not resort to impulsive trading. You will know when the market chooses its direction.