Bitcoin Price Technical Analysis for 16/4/2015 – Momentum Shifting

By April 15, 2015Bitcoin Business
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At the beginning of the April 15 session, we noted a bullish divergence in bitcoin, in the 1H chart. This is when price makes lower lows and the RSI makes higher lows. This does not always signal a reversal, but it reflects a slowdown in the bearish momentum and can often lead to some degree of consolidation if not bullish correction.

bitcoin 1h chart April 16
(click to enlarge)

The 1H chart shows that indeed after the 3-point divergence, price started to rally. Then, it failed to test the lows around 216-217 and held above 220 for the most part. By the start of the April 16 session, bitcoin rallied almost to 228 where it is challenged by a previous resistance pivot and the 100-hour simple moving average (SMA). Also, the RSI just tagged 70, which shows a momentum shift to the upside.

Now, with the prevailing trend being bearish, the current rally might be faded. The near-term market is looking a downtrend that is overbought, which is pretty much a set up for “sell-on-a-rally” type of trade ideas. But remember, we are talking about the near-term chart, and in the near-term, the downside risk would be back towards the 222 area. Nonetheless, there is more risk of falling lower in the short to medium-term as well. The 1H chart shows a completed ABC correction so it has completed a minimal correction structure and could be ready for bearish continuation.

bitcoin 4h chart April 16
(click to enlarge)

Now, if the market is not satisfied with a minimal ABC correction, it might rally towards the bottom of a previous consolidation seen in the 4H chart, around 230. Also note that here, price will be challenged by a falling trendline. If bitcoin does not turn lower in the April 16 session, look for resistance around 230, especially if the RSI is near 60. If there is a reaction here, we can expect the bearish trend to resume.

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