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 […].”
Needless to say, US$240 broke. Let’s look at the 3 trends for clues as to what lies ahead.
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$255.
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 rollover below 0 are signaling further downside is coming.
The 1 year Ichimoku (cloud charts) are 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 at US$255, which confirms the 50 Day EMA as a place that will hold major resistance.
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 about to roll over and give an even more bearish sign. The cloud in front has also seen a bearish crossover. Meanwhile, nothing in the Ichimoku chart shows signs of an imminent reversal. For further definitions of what is being discussed please refer here.
Using Fibonacci retracements from an intermediate term price high of US$429 recorded in mid- November, we see that the price has broken through all Fibonacci support levels and is likely to test 200, where it should find some support if for no other reason than it’s a big round number. 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.
Looking at the short term trend (mid-March high) using Fibonacci retracements, the short term price trend is sitting right on the support as of this writing. If it breaks below 234, 218 is the next minor support area before 200. The short term RSI and MACD as well as Money Flow Index are in a similar decline.
Price certainly looks poised for a lower move as the internals are not showing any signs of strengthening.
All 3 price trends are bearish right now. Broken support becomes resistance so if bitcoin is to rally, there will be many resistance levels above which will need to be broken through (Fibonacci levels) along with the moving averages.
For now, looking at those levels isn’t important as the bitcoin price seems to be headed lower and looking for support. Once price broke through US$240 and all the indicators are continuing to weaken, it’s looking very likely that price will test lower levels as mentioned above. For now, there aren’t many reasons from a trend standpoint to look to initiate buys.