Bitcoin price Bollinger Bands gave way today as price rolled over and dropped through a second support level to below $450. Additional decline is now a certainty and we look at some of the technical factors at work.
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Time of analysis: 13h00 UTC Bitstamp 4-Hour Candle Chart
From the analysis pages of xbt.social, earlier today:
Bitcoin price is currently below the 4-hour 200-period moving average (red) that was identified as critical local support in analysis during this week.
The breach now opens decline to a long-term Fib line support that originates at the January 2015 low, annotated in grey.
The 4-hour chart’s indicators are tending to oversold territory and imply an upward correction before additional decline: the stochastics are beginning to group at their minimum (magenta circle), RSI is deeply oversold (blue circle), and below it MACD is touching its lower Bollinger Band. This combination of indications do not necessarily imply an end of decline, but merely a corrective pause.
Speaking of Bollinger Bands, the indicator’s inventor, John Bollinger, today remarked on the bitcoin price chart via Twitter: @CarpeNoctom @flibbr Yes, that is a LOT of compression. Time to pay attention! As a measure of instrument aggregated volatility (whether price, electric current, etc), Bollinger Bands provide a visual measure of compression and decompression cycles that underlie whatever they envelop. As we see today, price had compressed into a consolidation and has subsequently made a breaking move to the downside. This fits with the larger timeframe analysis, presented during the past several weeks, that saw technical factors pointing back down in the chart.Hopefully, the decline will be quick and […]
