Bitcoin Price Technical Analysis for 10/8/2015 – An Expected Decline

By August 10, 2015Bitcoin Business
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US Presidential Candidate Rick Perry Shows Support for Bitcoin
US Presidential Candidate Rick Perry Shows Support for Bitcoin

In the previous Bitcoin price technical analysis Go Short Now!, it was explicitly stated that the current action in Bitcoin would lead to a big decline in Bitcoin and that short positions should be created. As can be seen, Bitcoin did crash down to $260, slightly above my target of $257 over the weekend.

Bitcoin is currently trading down 4.34 percent at $265.06.

Bitcoin price chart
Bitcoin price chart

Image: https://www.tradingview.com/x/d4WybCv5/

But, the big question now is: What to do? Should we stay short or should we book profits?

As the technical indicators approach oversold levels, it’s best to practice a bit of caution. Read on below the latest technical indications for further clarity.

Bitcoin Chart Structure – Earlier trading in a descending triangle, Bitcoin finally breached the support and kissed $260. A closer look at the daily BTC-USD price chart above suggests that the next strong support is near $255-257.

Fibonacci Retracements – As the bearish pressure increased, Bitcoin pierced through the 50% Fibonacci retracement level of $268.50, and is sustaining below it. The 61.8% Fibonacci retracement of $256.82 is expected to be a strong cushion in the near term for Bitcoin.

Moving Average Convergence Divergence – The MACD has dived into the negative zone, Histogram has sunk even lower and Signal Line has witnessed a sharp depreciation over the weekend. MACD now reads -1.8897, Signal Line reads 1.8500, and Histogram has a value of -3.7397.

Momentum – The Momentum now reads -19.2700, while its previous reading was -16.9100.

Money Flow Index – The MFI has simply crashed from 49.1053 to 22.2503. Values below 20 suggest highly oversold conditions.

Relative Strength Index – The strength reading has taken a hit as well; the 14-day RSI is 38.9959.

Conclusion

It is best to cover a major percentage of the short positions now or when it retests $260 as the risk-reward ratio is 1:1 (roughly). Wait for a good bounce to build short positions or long positions when the price nears $255.

Bitcoin is currently trading down 4.34 percent at $265.06. Bitcoin […]

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