Pursuant to my earlier Bitcoin analysis titled Teetering Bulls, the digital currency continues to slog as US Dollar Index crosses 100, its highest level since 2003. With more gains seen for the Dollar Index in the coming sessions, things may turn extremely difficult for the Bitcoin bulls. Each Bitcoin is currently worth $290.
As can be clearly seen from the 240-minute BTC/USD price chart above, the bullish momentum suffered a huge dent as it broke below the long-held, upward-sloping support. However, the bearish plunge lacked sufficient pressure to pierce the Support Line 1, from which the price has again taken support and is climbing upwards. But, unlike previous times, this could be a sell-on-rise opportunity.
Upward Resistance – Technically, when a support is breached, the support becomes the new resistance. The stronger the support it was, the stronger the resistance it becomes. The breached upward sloping trendline was tested at least 3 times (as can be seen from the chart) and hence, the level represented by it is expected to act as a strong supply region, which comes close to the ever eluding $300-mark.
Relative Strength Index – The Relative Strength Index reading has already touched 58.43, even as the price lingers around $290. It is expected that levels close to $300 will see the RSI in the overbought region. If the price rise is not supported by an improvement in strength reading, that is another problem for the bulls.
Moving Average Convergence Divergence – The MACD reading is barely positive at 0.0268, signifying that the cryptocurrency is still lacking the desired momentum to push its price higher.
Hence, it is recommended that a sell on rise strategy be implemented. Long traders can consider booking partial profits close to $300. Fresh short positions can be built around $300 with a stop-loss placed just north of it, for a target of $280.