Bitcoin has registered another failed attempt at crossing the $255 hurdle. The short selling saw the price dip to near its previous low of $236.40 before regaining to the current level of $245.31. I mentioned in my previous analysis that any rise up to $255 can be used to go short in this counter.
But interestingly, things may change for the digital currency going ahead. And this has been deduced by technically analyzing the 240-minute BTC/USD price chart.
- Chart Structure – As can be seen from the chart, the bulls made an attempt to rise above the Downward Resistance (marked above) but the rise was halted by the 50% Fibonacci Retracement level. It was followed by the price collapsing back to $236 and cracking below the Downward Resistance. However, a close above this resistance now will confirm $236 as a near-term support and long positions should be built.
- Fibonacci Retracements – Bitcoin has formed a narrow trading region between two significant Fibonacci Retracement levels: 50% ($253) and 61.8% ($242). Respecting the 61.8% retracement might weaken the pessimistic mood which could lead to short covering and a substantial increment in price.
- Moving Average Convergence Divergence – A divergence has been noted between the actual price action and the MACD indicator. Noteworthy is the fact that even when the price dropped to previous lows, the momentum indicator did not display a weakness. The MACD reading was slightly changed to -2.0619.
- Relative Strength Index – The RSI value dipped to 36 but registered a higher low. This implies that bulls are preparing to regain their lost glory at the slightest positive instant.
Market participants are advised to lighten their short positions and consider building long ones. Sustaining above the downward resistance can lead to a rise of up to $255. The market seems to have formed a near-term base around $236.