Consistent with yesterday’s analysis, Lackluster Moves, Bitcoin has been bogged down by profit booking and minor selling, and has reached the crucial Support Line 1. This support level has been reaffirmed several times before, and hence, any breakdown below this could lead to a free fall in the Bitcoin price.
By technically analyzing the BTC/USD 240-minute price chart, my recommendation is to sell on the rise. Here are some technical considerations which push me to this conclusion.
Lower Top Confirmed – The technical indicators had for long been pointing to a fading bullish momentum and the same has been confirmed as the digital currency registered a lower top before succumbing to $280-odd levels. This has lowered the near-term resistance from $300 to $295 (marked in the image).
MACD – The Moving Average Convergence Divergence indicator has turned on its head and is now at -0.5539. The Histogram value of -0.9631 also adds to the bulls’ concerns.
Relative Strength Index – A major discomfort for the digital currency comes from the value of RSI dipping below the 40-level. As can be seen from the chart above, the market has violated this level for the first time in March. The value has now inched back to 40.4019, but it has definitely punched a hole in the bullish mood.
Momentum – The latest Momentum indicator reading is strongly negative at -6.4200. Negative Momentum reading is a clear indication that bears are stepping up their game and bulls might get battered if they fail to make a move soon.
Keeping all the above factors in mind, I recommend that any significant advance up to the resistance level of $292 should be used to sell the cryptocurrency, while a strict closing-basis stop is placed at $295. The target on the downside is $270. Aggressive traders can also go long at current price for a target of $288 by maintaining a stop-loss just south of $280.