Bitcoin is trading at the crossroad as we enter mid-week. After falling from last week’s high near 238 to 2014, which is lower than last week’s low, btcusd rebounded all the way back to 232.
This rally pushed back above the 200-, 100-, and 50-hour simple moving average which took away the bearish bias. The RSI tagged 70, which not only killed the bearish momentum but showed bullish momentum in the near-term. During the April 28 session, bitcoin retreated but held above 222. Note that price is essentially trading between a falling trendline from last week and a rising one from this week. It is also “trapped” between the moving averages. This shows a market at the crossroads, uncertain of even the short-term direction.
The longer this uncertainty goes, the more significant a breakout will be. The market seems to be setting up 220-222 as a key support area and the 230-232 area as key resistance. Now if price pushes above 232 with the 1H RSI holding above 40, we are back into a bullish trend in the very short-term. This scenario pressures the 238 high with risk of breaking higher, with the April high around 262 in sight.
A break below 220 however should signal bearish continuation especially if the RSI falls below 40, and more so if the RSI tags 30. We favor the bearish outlook because the prevailing bias is still bearish in the short to medium-term, as we can see in the 4H chart.
The 4H chart shows that price is still trading under the 200-, 100-, and 50-period SMAs as well as holding under a falling trendline from the high around 300 in March. The RSI has tagged below 30 and is still holding below 60 after this week’s rebound. This suggests the bias and momentum are still bearish.
To the downside, a break below 220 would first expose the 214 low down to the 210 common support from February. A break below that opens up the low on the year around 166.
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