@ Btc bullish @
Bitcoin (BTC) fell sharply last night after rejection at a critical downtrend resistance as can be seen on the BTC/USD daily chart above. The price action appeared weak as Bitcoin (BTC) failed to hold the 200 EMA and fell right through it. However, the bearish momentum weakened as Bitcoin (BTC) bounced off the 100 EMA and found temporary support. Currently, RSI and MACD indicators for BTC/USD indicate short term oversold conditions and consolidation is likely before the next move up or down.
At the time of this analysis, Bitcoin (BTC) is currently down 2.5% against USD and is currently resting at 100 EMA on the daily chart. The price after being rejected at the historical resistance now risks testing the lower limit of the triangle it is trading in. To do that, it will have to breach both the 100 EMA and 50 EMA. If the price falls down to test the $5,800 support at this point, there is little to no hope of a recovery and the most probable scenario will be that the price will break the support to fall even lower to ultimately find a bottom between $3,000 and $5,000.
Even renowned Bitcoin (BTC) maximalists like Arthur Hayes and Mike Novogratz are not yet convinced if Bitcoin (BTC) has found a bottom. Arthur Hayes believes that it would be best for Bitcoin (BTC)’s long term prospects to test sub $5,000 levels and actually find a support. That way, Bitcoin (BTC) can commence a more aggressive and successful rally as more investors would comfortably get onboard being convinced that the bottom is in. On the other hand, if Bitcoin (BTC) rises from here to touch $10,000 and then starts falling back again towards the end of the year, most investors (except for market makers) would remain confused as to what is going to happen next. That way, interest will continue to dwindle and negative news (FUD) will dominate the day to day.
Currently, the 4H chart for BTC/USD shows that Bitcoin (BTC) may still fall lower to test the 200 EMA on the 4H timeframe but most technical conditions are already in the oversold range. RSI in particular is currently trading below 40 and is at its lowest level since the beginning of the month. MACD does show some signs of hope but at the same time, it is likely that this correction may be extended till mid August. If the price fails to bounce off the 200 EMA, it will have to fall lower to test the $5,800 level.
Currently, the momentum is strongly in favor of the bears but the sell pressure seems to be overextended and a short term bounce might be in order. While it is likely that Bitcoin (BTC) may actually bounce off the 200 EMA and head towards the downtrend resistance to break it, the lack of bullish momentum especially after the ETF rejection is likely to keep that from happening and the most likely scenario will be that the price will continue to head lower in the days ahead.
Posted using Partiko Android