Over the weekend, we saw bitcoin fall into a bear’s market. After a week-long consolidation that had support down around 235, bitcoin fell below this range over the weekend. As we get into a new week, the cryptocurrency remains in bearish action pushing to 223 as we begin the 6/1 US session.
Some might see that there is a bullish divergence between price lows and RSI lows in the 1H chart. However, if the market is bearish, this bullish divergence would be insignificant. On the other hand, we can see bearish reversal signals – price highs getting lower while the RSI high gets higher. According to RSI guru, Andrew Cardwell who coined the term bullish and bearish reversals, this technical condition suggests further downside.
The 4H chart shows a market that has been essentially trading sideways. We know that from the flatness of the moving averages. Early in May, price appears to be anchoring to the upside, but we saw this bullish attempt quickly fizzle by mid-month.
Now, after the weekend, price is back below the cluster of moving averages and breaking a previous support pivot around 226. We basically have a failed bullish attempt, which can translate into a bearish outlook at least towards the April low around 214, with risk of falling towards the 200 psychological level.
The daily chart shows that even though price has flattened out in 2015, the prevailing bearish bias still remains. Note that price is now holding under the 200-, 100-, and 50-day SMAs. The RSI came back to 30 in April and has since held under 60, showing revival of bearish momentum.
Now, we noted pressure on the 214 low with 200 in sight. A break below this area should open up the 167 low on the year with risk of extending lower in continuation of the 2014-downtrend.
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