Bitcoin price achieved a new high at $540 (Bitstamp) and 4000 CNY. The $550 resistance level remains untouched and should still be on the cards if the market can maintain momentum.
Bitcoin Price Analysis
Time of analysis: 14h00 UTC
Bitstamp 1-Hour Candle Chart
From the analysis pages of xbt.social, earlier today:
Bitcoin price sold off rapidly from $540 in the Bitstamp chart and now looks to be either gearing up for the push to $550 resistance – or – for a correction lower. Corrective bitcoin price patterns are often ambiguous – looking similar whether they precede advance or decline – and it may be that the current drooping price pattern is a base for advance to $550. Let’s consider the technical indications.
The momentum indicators are diverging on each push higher – as we’d expect – and RSI (second from top) has reverse diverged to a previous low, as well as bounced from its 40% level.
MACD (immediately above price), although pointing down below its signal line, remains above zero. Price remains above its 1-hour 20MA (green).
In the 1-hour candle chart, above, it can be seen that the advancing price wave is losing both volume and upward trajectory. It may be that price is only slowing into consolidation prior to an energetic push higher, but we’d ordinarily expect to see an advancing price wave curve upwards, rather than lean forwards, as is currently the case.
In the 4-hour candle chart (not shown) the indicators are falling away from overbought, yet RSI has reverse diverged to a previous price low, thereby implying another new high.
If the 1-hour candle chart were to breakdown – meaning price below its 20MA, MACD falling below zero, and RSI dropping beow 40%, there is a high probability that the market will retest $500 (Bitstamp) or even the previous $470 resistance level.
$550 remains a likely target above, but be cautious of a large downside correction if nervous profit-taking should grip the market.
Bitcoin price advance has been steady but slowed down during Monday trade. Another push to $550 would be welcome but there are some signs that a price correction may set in at $550 – if the market can maintain buying momentum. A correction would reasonably test $500 or even the $470 level that defined the price ceiling of the past five months.
Bitfinex Depth Chart and Buy/Sell Volume
What do readers think? Please comment below.
Readers can follow Bitcoin price analysis updates every day on CCN.LA. A Global Economic Outlook report is published every Monday.
The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.
Bitcoin price charts from TradingView.
Image from Shutterstock.