ForexMinute.com — Last 24 hours in the cryptocurrency market displayed Bitcoin in a strong downward trend, where price crashed through some important downside levels and established a stronger bearish bias. Let’s have a detailed look:
Bitcoin 4H Chart
As you can see the 4H BitFinex chart above, Bitcoin has dipped a way too much below the 50-, 100- and 200-H SMAs, while the 4H RSI has also gone under 30 — indicating a strong bearish bias in the market. It gets further proved with the MACD blue curve which continues to go south — below the normal line and the saffron signal curve.
We usually do not include any fundamental reason behind crashes and surges. But this time, there is a great chance that the aforementioned drop has been caused due to two reasons: one, the upcoming Bitcoin regulatory framework in New York; and other, the lack of consensus to increase the Bitcoin block size. These factors are indeed hurting the confidence of both speculators and investors.
It doesn’t mean that Bitcoin is looking towards forming a double/triple bottom in future. There are still some string downside levels it is targeting for now — the ones that have initiated some really attractive rallies in past. We therefore are treating 220.54 as our in-term support level, with primary downside risk towards 218.26 fiat.
As price continues to target the in-term support, it would be better to place your short position towards the primary risk one the price breaks below 220.54. However, do not forget to place to stop loss near 221.00 as a rebound can take place as well, therefore invalidating the prevailing bias.
Conversely, if the price manages to hold above the in-term support, it is clearly targeting 230 as its next in-term resistance level. A break above this level will validate 233.04 as the primary upside target. Therefore, entering a long position towards the primary level will return decent rewards. However, make sure to set your stop loss just below the in-term resistance to ensure a timely exit in case of bias reversal.