Bitcoin price decline takes a break. The market is struggling to buy price higher in a correction, thereby, heralding the next wave of decline.
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Time of analysis: 14h00 UTC Bitstamp 1-Hour Candle Chart
From the analysis pages of xbt.social, earlier today:
Bitcoin price declined, as expected, on an xbt.social confirmation signal, yesterday. Overnight, a correction pushed back to the upside in the chart. A clear instance of RSI divergence accompanied the reversal as shown by magenta lines at the price lower low and in the corresponding RSI higher low.
Given the fact that the 4-hour chart is bearish, with its MACD below both zero and its signal line, and that the 1-day chart is about to enter a similar MACD alignment, we have to ask: What’s next?
The definitive answer, based on bearish charts at 15min, 1hr and 4hr timeframes, is: additional decline.
Notice in the 1hr chart (above), how the stochastics (top, magenta circle) are returning to their maximum, while RSI is about to reverse diverge to its previous high. This implies that once price has risen sufficiently to see the stochastics max out, RSI will be severely reverse diverged (blue annotations) and we’ll see a technically induced sell-off.The next question of interest to traders is: What is the expected decline distance? There are two scenarios for distance:1) a large decline to $600 or $560, as per the overlapping Fib extension targets and support and resistance at these levels, or2) a final subwave of decline to the consolidation pivot level at $640 (Bitstamp) from where price should reverse strongly into a new rally.The second scenario is based on the tendency of the bitcoin price chart […]
