FUD appears to be dragging Bitcoin price through the mud this week. What is really happening, consolidation or a bearish reversal?
Bitcoin Price Market Overview
As Bitcoin 00 pulls back from a week of inspiring gains, the mainstream media and an array of Bitcoin pundits are calling this a ‘crash’.
Rumors of Mt.Gox trustee, Nobuaki Kobayashi lining up more BTC and BCH for sale have dominated the press and the general sentiment toward bitcoin has turned bearish. Let’s take a quick view at some hourly charts to see how BTC truly stands.
An increase in selling volume after Saturday’s bear flag lead to lower highs and a series of bear flags ensued. As the RSI and Stoch dropped failure to follow through on the oversold bounce of the RSI gave bears the opportunity to capitalize on what might have been interpreted as a top.
Combine this with failure to maintain the higher low pattern on the hourly and 4-hour chart and this is what kick started yesterday’s pattern of lower highs for BTC.
Consistent rejections at $6,445 (1-hour chart) led to lower lows and this point now serves as a short-term resistance and aligns with the 23.6% Fib retracement level.
While the current drop might be disconcerting for some, a lower low would be $6,106, so while the short-term scenario is bearish one must recall that $6,121 and $6,200 have recently served as reliable demand zones so the possibility of a high volume bull spike is possible.
Traders should be sure to have a look at the Bitcoin Shorts chart to see if there was a spike in short positions over the past few days.
The 4-hour and daily chart also suggest that $6,350 could serve as a demand zone and the 1-hour chart (above) shows BTC consolidating below the 20-MA of the Bollinger band indicator as the 5-MA slowly creeps above the 10-MA.
The Stoch and RSI are well situated for the time being and as volume tapers off and BTC tightens, we could see a movement in either direction, though technical indicators point toward further downside.
The $6,448 mark is currently functioning as a short-term resistance and $6,360 is interim support. The daily chart also shows $6,557 as a point of resistance and BTC would need to drop below $6,227 to trade below the ascending trendline.
As mentioned earlier, a drop below $6,106 would set a lower low and should be a cause for concern, but we must also remember that $6,100 to $6,250 have served as a strong demand zone for buyers.
The 1-hour chart shows BTC consolidating and while short-term indicators hint at additional downside there are other factors such as strong supports that function as demand zones to counteract a drop below the most immediate supports.
$6,448 is the closest resistance BTC needs to overtake, followed by $6,557.
A drop below $6,106 could open the door for BTC 00 to revisit June lows.
Where do you think Bitcoin price will go today? Let us know in the comments below!
Images courtesy of Shutterstock, Tradingview.com
The post Bitcoin Price Analysis: It’s Getting Down to the Wire appeared first on Bitcoinist.com.