Bitcoin has presented before us an attractive trading opportunity to start the week. After breaking below a crucial technical support level, the digital currency has weakened considerably and may continue to depreciate in market value until it touches $230.
Trading under pressure, Bitcoin is currently worth $234.97.
Image: https://www.tradingview.com/x/2XMM4TYB/
Technically analyzing the 240-minute BTC/USD price chart reveals that the bulls will be under pressure in the immediate term and traders should consider going short in the counter on a rise.
Bitcoin Chart Structure – As can be seen from the chart above, Bitcoin is currently struggling to scale back above $240 as investors dump their holdings near the resistance level. It must be kept in mind that Bitcoin’s latest breach of floor was accompanied by a strong volume activity, indicating strong bearish bias at higher levels.
Relative Strength Index – Owing to the sideways consolidation and consistent pullbacks from near-resistance levels, the underlying strength in Bitcoin has weakened significantly. The latest RSI indicator reading of 37.2687 clearly points to the fading optimism in the digital currency.
Moving Average Convergence Divergence – Consistent with the pessimism surrounding the virtual currency, the MACD and the Signal Line readings are deep in the red zone. The MACD portrays the negativity with a value of -0.7551 while the Signal Line elucidates the flailing confidence of bulls with a reading of -0.8156. The Histogram is teetering just above the zero line with a value of 0.0605.
Conclusion
Taking into account the above technical considerations, it is advised that short-term traders utilize an advance up to $238 to build short positions in Bitcoin. The target on the downside is $230 while the stop-loss for the trade would be just north of $240 (closing basis). A bout of high volatility may end the sideways consolidation soon. Proportion the trading quantity keeping the personal risk-appetite in mind.
