Bitcoin has slipped further following the slow downtrend as the volume activity remains fairly muted. From yesterday’s observation of $234, Bitcoin has dropped to $231.98 while respecting the level of $230. It was mentioned in the previous analysis that $229 would act as a support level for the virtual currency.
The 240-minute BTC/USD price chart has been technically checked to revise the trading strategies.
Bitcoin Chart Structure – The chart structure indicates that Bitcoin has come in close proximity to the previous low of $229, and hence, a bout of short covering may hit the market leading to a relief rally. It is expected that Bitcoin will struggle to cross the resistance level of $236.
Bollinger Bands – Bitcoin’s fall is being limited by the lower range of the BB (see the chart above) while the 20-4h simple moving average, which has acted as a short-term ceiling, is now at $234.55.
Moving Average Convergence Divergence – The MACD indicator has weakened further, dropping from -0.9571 to -1.3530, while the Signal Line has plunged from -0.7436 to -1.1354. However, the magnitude of decline is pretty less in Histogram value, which declined from -0.2136 to -0.2176. Declining momentum readings will make it extremely difficult for bulls to make a swift comeback.
Relative Strength Index – After repeatedly testing the oversold boundary, the RSI indicator has managed to stay afloat. The latest reading of 36.0114 indicates that Bitcoin is still not out of the woods.
Bitcoin is currently in a no-trading zone. Traders and speculators are advised to wait for clear, concise signals from the market. Until then, only light positions should be considered, and on extremes; trade only when the price approaches $229 or when short covering pulls the price up to $236. Market participants must stay abreast with the Fed minutes to be released later today to avoid any rude price shocks.