At the current price of $247.66, Bitcoin is trading more than 2% down from its 24-hour high of $253.75. The downward trend is still evident in the digital currency and bears are entering the market on every rise. It is also expected that volatility will play a major role in the price action going ahead.
Image: https://www.tradingview.com/x/XZYWmVnE/
Presented here is the technical analysis of the 240-minute BTC/USD price chart which makes a strong case for the sellers.
Fibonacci Retracements – As can be seen from the chart above, the rise from yesterday’s $245.27 to a high of $253.75 was considerably subdued by fresh selling. Interestingly, the level of $253.75 is of great technical importance given that it coincides with the 50% Fibonacci retracement level of the period spanning February to mid-March. The level has earlier acted as a strong support and is now a major resistance. Bitcoin can now take support from the 61.8% Fibonacci retracement level of $242.79 but, since that has been violated before, bulls must not hold high hopes.
Price Action – The overall price action in the digital currency is a textbook lower-top, lower-bottom. Since peaking out at $298 in mid-March, the cryptocurrency has never made an attempt to threaten the previous tops. The Downward Resistance (marked in the chart) suggests that Bitcoin faces a major hurdle near $255-258.
Moving Average Convergence Divergence – The sustenance of MACD and the Signal Line below 0 is a great concern. The latest MACD value is -2.9895 while the current Signal Line is -4.0728.
Relative Strength Index – With a value of 42.9372, RSI also fails to support the bulls. Unless the reading sustains above 50, Bitcoin runs the risk of reaching fresh lows.
The above assessment reveals that bears continue to hold a tight grip on the cryptocurrency, and that rallies should be used to go short. The stop-loss can be placed just north of the mentioned Downward Resistance for a price target of $230.
