Bitcoin has been consolidating since hitting a low around 166. Price has rebounded above 300 briefly, and then retreated. Still, BTCUSD has been hanging onto the consolidation mode in what appears to be a triangle. With price action already so close to the triangle apex, a breakout is imminent, but it will not be of much significance by itself. Let’s see what other technical clues we will need.
The daily chart shows that since price tagged 300, bearish candles have dominated. In fact, last Friday’s bearish candle combined with the previous 4 daily candles is a bearish signal. Furthermore, a few candles back, we witnessed a bearish engulfing candle.
Price action has been holding below the 200-, 100-, and even 50-day SMAs, showing that the bearish bias from the prevailing downtrend is still strong. Also, the RSI has held under 60, which is a sign that the prevailing bearish momentum is intact. On top of that, the RSI and price action is showing a bearish signal call negative reversal (coined by RSI guru Andrew Cardwell), which is essentially a lower high in price coinciding with a higher high in the RSI. Another downswing is favored.
The breakout to the downside is imminent, but we might want to see some shifts and thresholds broken in the near-term/short-term first.
In the 4H chart we actually see some bullish bias. Price has been holding above the 200-, 100-, and 50-period SMAs. The RSI has tagged above 70 and has since held above 40, except for a brief moment at the beginning of this week. Basically, with the bullish bias still in play in the short-term, a rally above 248 ( a break above the previous high and the triangle resistance) would signal bullish continuation for the short-term, and further consolidation for the medium-term.
However, if price instead falls below 228, bitcoin would have cleared the rising trendline, last week’s low, and therefore expose the low on the year just under 170.