Bitcoin has continued its decline since starting the week with a bearish breakout from the weekend consolidation range seen in the 1H chart. During the April 14th session, price fell to about 216 before the global April 15th session began. As we can see in the 1H chart, there is a bullish divergence between price and the RSI (A bullish divergence occurs when price makes lower lows but the RSI makes higher lows). This suggests a shift in momentum, or at least a deceleration, which can be a sign of upcoming consolidation or bullish correction.
The 1H chart shows a 3-point divergence (3 lower price lows and 3 higher RSI lows). Meanwhile, we are indeed seeing a bullish attempt from the 216 level. Now, the prevailing trend is still bearish and intact, and if price comes up to the 228 area, we should start to expect resistance, up to the 232 area. Above 235, price might make a run towards the 240 consolidation high.
We should also watch for resistance when the 1H RSI approaches 60. If price stalls around 230 and the RSI stalls around 60, we should get ready for another bearish attempt to test 216 with risk of falling towards the 210 support seen in the “zoomed-out” 4H chart.
Below 210, the market first tests the psychological level of 200, below which, the low on the year at 165 will be in sight.
If there is a more significant bullish correction than noted above, we should still limit the bullish outlook to 250, around which a falling trendline from March’s highs around 300 would challenge the bullish correction. Again, in the more significant correction scenario, the RSI should find resistance around 60. If so, the bearish outlook will remain in play in the medium-term.
A break above 262 might be needed to introduce the bullish outlook. For now, it is bearish, or bearish-neutral (if price climbs above 235).
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