What remains uncertain is its near-term movement which has been haphazard over the past few days. A bullish start to the day saw Bitcoin climb momentarily above its 50% Fibonacci Extension but this move seemed to be swiftly denied by the sellers. Gains diminished over the past couple of sessions as the king coin fell below the $34K-mark and headed back towards the lower trendline of its ascending channel.
Bitcoin 4-hour chart
After Bitcoin bounced back from the $32K mark on the back of a sharp retracement, an ascending channel was spotted on its chart. Although BTC climbed above its 50% Fibonacci Extension level at $34,237, a rise above its up-channel failed to materialize as prices moved back within the pattern. The lower trendline coincided with the 20-SMA (red) and was an important area for bulls to defend this region from a breakdown over the coming sessions. A close below the shorter-term moving average line could result in another 2.4% decline towards the $33,000 level.
Reasoning
Stochastic RSI underwent a bearish crossover in the overbought region and indicated some downside moving forward. The Directional Movement Index, although still indicative of a bullish trend, converged at the time of writing. If the -DI crosses above the +DI, a bearish outcome can be expected. On the other hand, EMA Ribbons moved below the candlesticks and provided some extra buffer against a price drop. If buyers maintain BTC above the $33,600- mark, a temporary surge can be expected back above the 50% Fibonacci Extension.
Conclusion
At the time of writing, Bitcoin tested an important defensive region of $33,600- one that could determine its near-term movement. Since the aforementioned level was backed by multiple Moving Average lines, a breakdown could be avoided and short-term push can be expected back above the 50% Fibonacci Extension at $34,327, representing a rise of nearly 3% from its press time mark.
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