Bitcoin started the week with a bullish breakout. In the 1H chart we can see that after the dull and tight price action of the weekend BTCUSD broke to the upside to start the week. We noted that even though it showed some bullish momentum by pushing the 1H RSI above 70, bitcoin price still had to break above the 270 handle to clear the consolidation since the end of last week.
The market failed to clear 270 and retreated. A couple of sessions later, price has fallen sharply since the failed bullish breakout. Now there is a breakout to the downside, clearing a rising speedline from last week’s low of 247. Price is holding under the 200-, 100-, and 50-hour SMAs, which are sloping down and are almost fully in bearish alignment (we still need the 50-hour SMA to cross under the 100-SMA for them to be in bearish alignment). The RSI has broken below 30, even 20, reflecting revival of the bearish momentum.
Probably the most important fact is that price broke the 247 low from last week, although it is starting the 3/25 session consolidating around it. We probably won’t see another strong move until at least the US session. If that move is bullish, look for resistance in the 260-265 area, which represents some of the support area for price action since the weekend. The 1H RSI should also hold under 60 in the bearish scenario.
The 4H chart also shows the bearish scenario developing as price held under the cluster of 200-, 100-, and 50-period SMAs. The RSI tagged below 30, even below 20, and then held below 60, showing maintenance of the bearish momentum. The first area of possible support for the cuirrent dip is around 230-235. Below that, support might be around some common lows around 210 down to the 200 psychological handle.
Below 200, then we might be seeing a slide back to the low of the year around 167.
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