Bitcoin Falls to Oversold RSI on Daily; Bullish Divergence?
Another Bitcoin knockdown occurred in the past few hours here as the trend is the bears friend for now. Let’s look at how much further this can fall.
On the hourly analog Bitcoin Bitfinex chart, you can see how price had a fairly sideways and uneventful majority of the day.
I had drawn that blue box on the chart yesterday focusing on that range between $6,825 and $6,625 indicating that whichever direction price should break out of there should give it some momentum. Price meekly did break upward around 19 EST yesterday evening testing the light blue 50 hour moving average, and as similar as this past weekend was unable to break through that level.
Price then made its way back down into the blue box, attempted to head to the 50 hour MA again, only to give up on little volume and tumble past the lows yesterday to a new low today of $6,436.
I drew a black horizontal support line at $6,500 which supports previous lows in April and encompasses the wicks on the February 5th low as well.
That low back from 3pm EST today at $6,436 also barely stays above the wick low from April 1st at 6,425. No bulls seem motivated to do any knife catching either because there is barely any push back up on these drops and the bears are in full control reveling in the bloody market. I have a last of $6,529 for now.
The RSI is intriguing for a buy at this level since there is again some strong bullish divergence taking place with the RSI making higher lows and the price making lower lows. I marked these on the chart and indicator with blue and green arrows respectively. There could be additional downside, however it would be a good idea to wait a few more candles to see if price continues lower.
The MACD on the other hand is looking quite bearish still. It’s curling downward and the red histogram lines are also sloping downward. Once the histogram lines begin flatting and returning back toward the median. We could see a temporary trend change. The fact that price also was halted right before the zero line on the indicator is not a good sign for the bulls as well.
We can look for price target on the daily chart.
On the daily analog Bitcoin Bitfinex chart, you can see the dire situation the bulls find themselves in. Price is all the way back at the lows of $6,500 and it certainly looks like the wick from back in April at $6,425 will be breached this time.
I would not be surprised to see a retest of the February 5th low at $6,000 this week. I have marked that on the chart with a maroon horizontal support line.
I have also drawn a Fibonacci retracement on this chart from the price move on September 15th to the highs on December 17th and by that metric price has completed a .786 retracement at that blue line at about $6,607.
The major pattern I see here is the descending triangle with the red down-trending line from January and the black horizontal support line we have been discussing. The descending triangle typically has bearish overtones to it and the declining volume the past few weeks has been confirming that.
However, it can also signal the a reversal if price begins increasing in volume again. Some people have mentioned that this could be a triple bottom, however I am not sure it fits the criteria with the previous price peak at the end of April. I’ll take a look at this again tomorrow.
RSI is now is oversold territory for the first time since Feb 5th sitting currently at 29.29. RSI would have to get down past 27, too signal a continuation of the bearish trend. If this candle closes here and price reverses there would be an indication of bullish reversal divergence, which I have marked with arrows again. We will need a few more days to confirm that.
-More on Vanddar.com
On the hourly analog Bitcoin Bitfinex chart, you can see how price had a fairly sideways and uneventful majority of the day.
I had drawn that blue box on the chart yesterday focusing on that range between $6,825 and $6,625 indicating that whichever direction price should break out of there should give it some momentum. Price meekly did break upward around 19 EST yesterday evening testing the light blue 50 hour moving average, and as similar as this past weekend was unable to break through that level.
Price then made its way back down into the blue box, attempted to head to the 50 hour MA again, only to give up on little volume and tumble past the lows yesterday to a new low today of $6,436.
I drew a black horizontal support line at $6,500 which supports previous lows in April and encompasses the wicks on the February 5th low as well.
That low back from 3pm EST today at $6,436 also barely stays above the wick low from April 1st at 6,425. No bulls seem motivated to do any knife catching either because there is barely any push back up on these drops and the bears are in full control reveling in the bloody market. I have a last of $6,529 for now.
The RSI is intriguing for a buy at this level since there is again some strong bullish divergence taking place with the RSI making higher lows and the price making lower lows. I marked these on the chart and indicator with blue and green arrows respectively. There could be additional downside, however it would be a good idea to wait a few more candles to see if price continues lower.
The MACD on the other hand is looking quite bearish still. It’s curling downward and the red histogram lines are also sloping downward. Once the histogram lines begin flatting and returning back toward the median. We could see a temporary trend change. The fact that price also was halted right before the zero line on the indicator is not a good sign for the bulls as well.
We can look for price target on the daily chart.
On the daily analog Bitcoin Bitfinex chart, you can see the dire situation the bulls find themselves in. Price is all the way back at the lows of $6,500 and it certainly looks like the wick from back in April at $6,425 will be breached this time.
I would not be surprised to see a retest of the February 5th low at $6,000 this week. I have marked that on the chart with a maroon horizontal support line.
I have also drawn a Fibonacci retracement on this chart from the price move on September 15th to the highs on December 17th and by that metric price has completed a .786 retracement at that blue line at about $6,607.
The major pattern I see here is the descending triangle with the red down-trending line from January and the black horizontal support line we have been discussing. The descending triangle typically has bearish overtones to it and the declining volume the past few weeks has been confirming that.
However, it can also signal the a reversal if price begins increasing in volume again. Some people have mentioned that this could be a triple bottom, however I am not sure it fits the criteria with the previous price peak at the end of April. I’ll take a look at this again tomorrow.
RSI is now is oversold territory for the first time since Feb 5th sitting currently at 29.29. RSI would have to get down past 27, too signal a continuation of the bearish trend. If this candle closes here and price reverses there would be an indication of bullish reversal divergence, which I have marked with arrows again. We will need a few more days to confirm that.
-More on Vanddar.com
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