Last week, bitcoin was in a bullish breakout but the rally stalled under 240. After that there was a slow drift to end the week. Throughout the weekend, btcusd continued to trade lower and plunged lower to 214 before the start of the week. This weekend weakness has brought bitcoin back to its prevailing bearish trend, keeping it intact.
As we can see in the 1H chart, btcusd ended last week with loss of its prevailing bullish momentum as the 1H RSI fell below 40. Then it continued to fall below 30 by Sunday, which indicated revival of the bearish momentum. Price also fell back below the cluster of 200-, 100-, and 50-hour SMA, meaning it failed to establish a bullish trend and has returned to the bearish mode at least in the very short-term.
As we get started with the week, there is a pullback. Now, if the trend is bearish this pullback should find resistance in the 224-225 area, and the 1H RSI should hold below 60. Now, if price pushes back above 230 and the RSI back to 70, then the bearish trend would no longer be in play, and the whippy price action over the past coupe of weeks would be indicative of a market without direction.
However, as we see in the 4H chart, the bearish continuation scenario is favored since the prevaiing downtrend remains intact.
Last week we noted that unless price continues above 240 and breaks the 200-4H SMA and a falling trendline, bears still have control of this market, even though the momentum is no longer persistent. It is a choppy downtrend.
Note that as we begin the week, the 200-, 100-, and 50-period SMAs are sloping down and in bearish alignment (200- above the 100- above the 50-period SMAs). Price is back below these SMAs and has made a new low on the month. With the prevailing downtrend still running, the next target this week will be 210, then 200. Below 200, btucsd will open up the 166 low on the year.
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