In my previous analysis titled More Downside Possible, I had mentioned of a bearish Head and Shoulders Pattern which had set the downside Bitcoin target at $260. Bitcoin did fall to $263 before rising again to challenge the broken neckline support and hitting an intraday high of $273.
Bitcoin can be seen trading up 1.19% at $267.69.
Image: https://www.tradingview.com/x/1CUkhgQl/
The latest price action in Bitcoin has made it incredibly difficult for an analyst to tell a direction. The technical indicators overlaid on the 240-minute BTC-USD price chart also fail to provide any significant clues to the future course of action.
Bitcoin Chart Structure – As can be seen from the chart above, the short surge in Bitcoin failed to uplift the price beyond the resistance posed by the neckline support of the Head and Shoulders Pattern. The cryptocurrency has retested the resistance at least twice and now seems to be heading lower.
Moving Average Convergence Divergence – The fall in the Signal Line reading has narrowed the gap between itself and the MACD, and has thus also lifted the Histogram from deep lows. But the values fail to provide any comfort either to the bulls or to the bears. The most recent values of MACD, Signal Line and Histogram are 1.7885, 2.0596 and -0.2711 respectively.
Momentum – The Momentum indicator has erased all the losses of yesterday’s trading session and is currently at -0.0100, closer to the neutral level of 0.
Relative Strength Index – The underlying strength reflected by the 14-4h RSI indicator is more or less neutral at 52.2641.
Conclusion
Bitcoin may continue to flirt with the resistance for some more time. Technical indicators do not provide conclusive signals. Traders may look at creating light short positions if the price approaches the resistance line while maintaining a tight stop-loss (closing basis) just north of it. Testing times for the market participants are here to stay.
