Trading with a slightly negative bias, Bitcoin has slipped to $244.28, down 0.94 percent yesterday. Even though the uptrend is intact, Bitcoin has failed to sustain above a key technical level which has led to severe deteriorations in the technical indicators.
Let us discuss each of the factors in the technical analysis of the daily BTC-USD price chart below.
Bitcoin Chart Structure – As has been marked in the chart above, the upward channel in which Bitcoin has been trading since the last week of September clearly holds. However, as discussed earlier, Bitcoin has failed to sustain above the 200-day SMA of $245.6081.
Moving Average Convergence Divergence – The MACD and the Signal Line remain strong with respective values of 2.2548 and 0.9165. This leaves Histogram with a value of 1.3383.
Momentum – The Momentum indicator has taken a severe hit following the decline; the value has eased from month’s high of 14.1800 to 5.1400.
Money Flow Index – In the previous Bitcoin price analysis The Momentum Grows Stronger, it was discussed that Bitcoin was extremely overbought considering the MFI value of near-80. However, those concerns have been taken care of as the value has dropped to 69.2220.
Relative Strength Index – That the underlying strength remains in favor of the bulls is depicted by the 14-day RSI value of 60.3310.
There is no reason to worry just yet. Market participants can continue to go long on Bitcoin with a tight stop-loss placed below $240. The cryptocurrency can face minor resistance while crossing the 200-day SMA, but above that, it will now aim for the resistance of the upward channel which comes at around $250.
In case, the market takes a U-turn and breaches the support of $240, exit all long positions and consider creating fresh short positions for a target of $235 by placing a stop-loss north of $242.