Last week, bitcoin stopped a bearish attempt and consolidated between 470 and 490. The market pushed above this consolidation range at the end of the week, but did not have any follow through. Over the weekend, price retreated, and therefore failed to break a couple of key resistance factors:
1) The 200-hour simple moving average (SMA).
2) A falling trendline connecting resistance pivots at 523 and 515.
Bitcoin 1H Chart 9/8
(click to enlarge)
The failed bullish attempt returns the pressure toward the downside, and the “price bottom” formed last week is being threatened. You can see that price is now back below the 100-, and 50-hour SMAs. The 1H RSI established bullish momentum when it pushed above 70. However it has since clearly broken below 40, showing loss of bullish momentum, though there is no bearish momentum yet.
Bitcoin looks like it is retaining the bearish outlook and ready for bearish continuation pending a break below 470. However, a break above the 9/6 high of 485 can keep the mode in neutral.
Take a look at the 4H chart. The market is bearish in this time-frame as well.
1) The 200-, 100-, and 50-period SMAs are in bearish alignment, sloping down, and just starting to spread apart again. Price is also under the SMAs. This describes a market in strong bearish trend.
2) The RSI has stayed below 60 for the most part since tagged below 30. This shows persistence of bearish momentum.
Bitcoin 4H Chart 9/8
(click to enlarge)
Bearish Continuation: Going along with the most apparent outlook – bearish, if price breaks below 470, the 442 August-low will be in sight. Below 442, there is a possible support from a common low around 420, but there is downside risk down to the 340 low on the year.
Bullish Correction: If price breaks above 495, it might be looking to test the consolidation highs just below 534. It will take a break above 535 to introduce a bullish outlook for the medium-term. Otherwise, we are simply in consolidation, or a slight bullish correction with a medium-term bearish mode.
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