Consolidating after Decline:
Bitcoin fell from a high around 480 last week, to 379 on Friday before consolidating. The 1H chart shows btcusd rallying to 431 before retreating. In the 1H chart, although price is in consolidation, all the technical signals are bearish.
1) The 200-, 100-, and 50-period simple moving averages (SMAs) are in bearish alignment, sloping down, and has price below them.
2) The RSI tagged 20, and stayed below 60 for the most part, showing maintenance of the bearish momentum.
Bitcoin 1H Chart 9/22
(click to enlarge)
Central Pivot:
Now, there seems to be a middle area, or central pivot area between 404 and 410. If price can hold below 404 like it is doing now, we have downside pressure toward the 379 low. If price can push above 411 ,then we are likely to have upside risk toward 431 in the near-term.
The 4H chart shows a market that is very bearish based on not only price action, but the moving averages and the RSI. If price pushes above 432, the next key resistance is probably around 455-460. The previous September support pivot and consolidation low is right around here. The 100-period SMA in the 4H chart is also just below 460. If bitcoin is bearish, we should see a rally reverse back to the downtrend around 460, especially if the 4H RSI stalls around 60. Note that the 4H RSI has held below 60 for the most part every time we had a consolidation. This shows that bears are still pushing the momentum downwards.
Bitcoin 4H chart 9/22
(click to enlarge)
Bearish Continuation:
If price stays below 410, the consolidation is probably softening, and the bearish continuation outlook would be taking over. A break below 377 would continue the prevailing trend with the 340 low on the year in sight. Seeing that the trend has been bearish throughout 2014, it is very possible that if price can reach 340, it can break it and open up the 300 handle.
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