As discussed in yesterday’s analysis titled Rebound Likely, Bitcoin has surged to $262.68 after hitting a high of $265.95. The big question now is: Has the selling abated?
As can be seen from the 240-minute BTC/USD price chart, Bitcoin has hit a key resistance level of $265, marked as Resistance Line 1. A breakout above this line will set the next target at the Resistance Line 2, i.e. at $280.
Now, let’s get to what the technical indicators are saying.
Moving Average Convergence Divergence – The MACD indicator value of -6.8775 is languishing near yesterday’s lows. The Signal Line has also stooped to a new low of -7.1238. Having stated these, I must also mention that the Histogram value has nudged above the zero level at 0.2463.
Momentum – The Momentum indicator has been maintaining a lower-top, lower-bottom structure since March 10 (marked in the chart). A declining momentum eventually caused a price collapse in the cryptocurrency, which touched $250 in panic selling.
The downward trend in the Momentum reading points to a resistance near the 0 level. And the oversold cryptocurrency could surely use some bullish momentum.
Relative Strength Index – The RSI had also been sloping downwards (marked in the chart) in strong correlation with Momentum indicator. The continuing bearish trend interestingly puts the resistance at 50, which also happens to be the neutral level. But, sustaining below the downward trendline will only put more pressure on the Bitcoin.
I believe that bears have put a hole in the Bitcoin’s hot air balloon and it would see some more correction before heading north again. I maintain my price target of $230 in the medium term and would advise shorting or booking profits on every rise until the mentioned resistance levels are breached. Positions must be built keeping the personal risk appetite in mind.