In what appears to be the first conclusive sign of an upcoming breakdown, Bitcoin ended yesterday’s trading session at the lowest closing for September-to-date. And currently, Bitcoin seems to be staging a fake pullback to entice more market participants to go long without reading too much into the breakdown.
Bitcoin is currently trading at $227.92 and the resistance is now at $228.60.
Image: https://www.tradingview.com/x/3ju55qL8/
In the previous Bitcoin price technical analysis A Disappointing End to the Week!, we discussed how the technical indicators were reflecting the bearish sentiments in Bitcoin, and today, we are going to continue a tad more with that.
Bitcoin Chart Structure – Yesterday, the cryptocurrency fell in quick time to a low of $225 before pulling back, but failed to respect the support line (marked now in the above chart as Resistance) which had cushioned it several times before.
Moving Average Convergence Divergence – The MACD and the Signal Line continue to stick with each other in the negative territory. Their respective values of -3.1691 and -3.0603 should be a reason of worry to the Bitcoin bulls.
Momentum – Now in the pullback mode, the Momentum indicator is also showing an uptick in the value. The value is still negative though, at -6.8700.
Money Flow Index – The MFI is incessantly crashing to newer lows, approaching the 1-month low. Its current value is 29.3477.
Relative Strength Index – The underlying strength remains unsatisfactory at 41.8136.
Conclusion
According to the chart structure, Bitcoin has pierced its support level on a closing basis and warrants a higher degree of correction. However, with $220-225 repeatedly acting as the bulls’ mansion, it will be very interesting to see how the market behaves from here on.
Market participants can build light short positions by placing a tight stop-loss above the mentioned resistance for a target of $220 until $220 is taken out.
