The Bitcoin price continues its long steady decline.
Last week we said:
“Bitcoin price has continued experiencing downside pressure and as of this writing the price looks headed for a retest of the 200 area. Last week’s recap: If US$240 doesn’t hold, the US$220 area could provide minor support, but U$200 would more likely be an area to watch for bigger support. If it fails to hold, a retest of the lows (US$165-180) will certainly be the next area to watch […].”
The price proceeded downward as we stated to reach US$210 before it rallied back up above minor support at US$220. As of this writing the price is ~224. Nothing has changed as far as the trend goes, bitcoin remains in a primary downtrend.
The 1 year chart (long term) of bitcoin remains bearish. Price continues to decline. The price remains below all 3 of its Exponential Moving Averages (EMAs). The 50 day EMA will continue be a major resistance area and right now that is approximately at US$245.
Also note the slopes of all 3 EMA’s are bending downwards as well. This is symptomatic of falling prices that aren’t ready to rise and if they can continue to slope downwards the price will follow, which can lead to an accelerated downtrend.
All 3 indicators are confirming the downward move in price. The RSI and the Money Flow Index along with a declining price and a MACD below 0 are signaling further downside is coming. Simply put the price is exhibiting very little signs of strength.
The 1 year Ichimoku (cloud charts) continues confirming this bearish scenario. The price is below the cloud, which is bearish. The cloud is resistance and the lower bound of the cloud is atUS$254. What is more disturbing is the cloud in front of the price (which is ahead in the future 26 days). It is future resistance and it is at US$225. The given cloud had a bearish crossover and is predicting lower prices in the future. The cloud continues to descend, pressuring the price.
Aside from the price below the cloud, the Chikou Span (Lagging Line) is below the cloud along with the Tankan Sen (Conversion Line) and the Kijun Sen (Base Line), which are steeply sloped downward confirming the bearish price outlook. Meanwhile, nothing in the Ichimoku chart shows signs of an imminent reversal.
Using Fibonacci retracements from an intermediate term price high of US$429 recorded in mid- November, we see that the price is sitting on support right now at ~US$223 and if this breaks again we will very likely test 200, where it should find some support. If this doesn’t hold the lows are in play. The RSI and MACD are both confirming the likelihood of this event as well. The arrows show the direction.
Also note the Directional Movement Index, which looks at buying and selling pressure. The blue line indicates buying pressure, the red line indicates selling pressure, and the orange line is the ADX, which indicates the strength or weakness of a trend. As one can see selling pressure is far above buying pressure and the ADX is at a high level, which shows the selling pressure still has the upper hand. The ADX is looking like it may cross over the red (selling pressure line), which may provide some slight ease allowing the price to reach the US$230-235 area, where it will encounter resistance.
Looking at the short term trend (mid April high) using Fibonacci retracements, the short term price trend is finding resistance at the .764 price level of US$225. If it breaks below US$222, then US$219, US$217 and US$214 should provide minor support before 210, which was the low of the latest move. If this doesn’t hold, US$200 will certainly be tested. If price can break above US$225, it could test ~US$230 before it resumes its downtrend.
Price certainly looks poised for a lower move as the internals are not showing any signs of strengthening.
At the risk of sounding like a broken record, all 3 price trends are bearish right now. Broken support becomes resistance so if bitcoin is to rally, there will be many resistance levels, which will need to be broken through (Fibonacci levels) along with the moving averages, as well as Ichimoku.
For now, looking at those levels isn’t important as the bitcoin price seems to be headed lower and looking for support. If price doesn’t hold in this area we should test US$200 very soon. It’s sit on your hands time. Be patient and wait for the price to tell you what to do.