Bitcoin Slides Sharply and is Testing a Trendline Support

Bitcoin Slides Sharply and is Testing a Trendline Support

Since this past weekend, bitcoin has been consolidating between roughly 246 and 238.50. As the 5/13, Wednesday session wound down, btcusd fell sharply, breaking this consolidation range and almost tagging 234 before stalling.

Bitcoin (BTCUSD) 1H chart 5/14
btcusd 5/14 1h chart
(click to enlarge)

The 1H chart shows the bearish breakout with volume, which also put price south of the cluster of 200-, 100-, and 50-hour SMA. The 1H RSI also fell below 30, which represents initiation of bearish momentum.

At this point if there is a pullback, and price is able to hold below 240 for the most part, the bearish breakout would still be in play. A break above 242 will be needed to shelve the bearish outlook, and revive the bullish one. Let’s examine the 4H chart before we make an assessment on whether bitcoin has turned bearish in the short-term.

Bitcoin (BTCUSD) 4H chart 5/14
bitcoin 4h chart 5/14
(click to enlarge)

when we look at the 4H chart, we can see that the cryptocurrencty still has a couple of bullish technical conditions.
1) Price is still above the 200-period SMA and can still bounce off of the 100-period SMA.
2) Price is still holding above a rising trendline coming up from the 213-214 support pivot.

The bearish conditions include:
1) Strong bearish candles since finding resistance at 249.
2) The RSI is showing a loss of the prevailing bullish momentum since at least last week.

So, if price bounces off of the current low and returns above 242, the pressure will be back on the 249-250 area, with risk of extending towards a resistance pivot around 262, then the 300-315 highs from the end of January and early March.

If price bounces off the trendline but retreats from around 240, traders will have an even stronger chance of breaking btcusd below the 234 support pivot and the rising trendline. This will open up the 213-214 low.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at