BTC-USD Rejects $600, Looking to Test $560

August 11, 2016 16:51 by Jamie Holmes    

As Bitfinex moved on from the recent hack  and resumed trading yesterday, buyers tried pushing BTC-USD above $600  in anticipation of the exchange coming back online. But sellers managed  to control the upsurge, bringing yesterday’s close down to $590.27 on  the Bitstamp exchange. This suggests that buyers are exhausted and rejected the fractal resistance at $598.81. Also, Bitfinex has recently offered a $3.6 million bounty in an attempt to find the stolen bitcoin. The company has also bounced back with some interest in their ‘BFX tokens’; the first such debt-based cryptocurrency that is polarizing opinion. Only a daily close above the fractal resistance at $598.81 will the invalidate our outlook that BTC-USD  still remains exposed to the downside. The daily price action on the  Bitstamp exchange is shown below. The chart below indicates that  equilibrium will be found around the base (red) line, currently at  $574.73. The market will now look to test this support level. If there  is a daily close below $574.73 today, then we should see bearish  momentum intensify.   

 The conversion line is starting to trend upwards but in consideration  of all other Ichimoku indicators, the risks remain more weighted to the  downside. Only when the conversion line starts to trend higher than the  base line may indicate a lower chance of the market moving lower.  

The 4-hour price action is displayed below and the most recent 4-hour  session close managed to break below the base (red) line. After  breaking this support level, we should see the market now move to the  downside. The price will now tend towards fractal support at $579.43; a  break of this fractal support will then see the market head towards  $560, the support level provided by the lower span of the Ichimoku  cloud. 

On the other hand, a break above $603.00 is required for a safer  entry into a buy for BTC-USD on the Bitstamp exchange. This is  highlighted below with the yellow ray. A break of this resistance will  see the market establish fresh highs and an attempt to find the next  ceiling. 

However, the 4-hour chart above illustrates bearish divergence. The price  has recently made higher highs, highlighted by the purple trendline, but  the momentum indicator has made lower highs, suggesting we will see  further downward moves towards $560-$540. The Awesome Oscillator is  signalling that downward momentum is starting to dominate and will give  further bearish confirmation once the indicator crosses from above to  below the threshold at zero.  

After struggling to remain above the key $600 psychological level,  this area has provided strong resistance and the market now looks to  head lower. A short-term dive would most likely see a reversal around  $560-$540.         

                      

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NOTE: this is the Steemit version of our web article.