Bitcoin was bearish last week and extended lower to start this one, but found support at 442 during the 8/18 session. Now, as we get into the 8/20 US session, it seems like the market is consolidating and in fact threatening to break above a falling short-term trendline from last week. A break above this line should not be a seen as a sign of reversal, but a reflection of the current consolidation mode in the short-term.
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ABC Correction; Momentum: If you take an ABC correction scenario, with the C=A projection, the current rally can be projected toward 518, near the 520 common high from a brief consolidation at the end of last week. If the RSI is also near 60 at that point, look out for a bearish attempt. If the bearish momentum is to be maintained in the 4H chart, the RSI should not push above 60.
Resistance: If price does push above 500, then does not stop around 520, we can expect a stronger bullish correction, but still keep the bearish outlook in the medium-term. The next key resistance can be around the 550 area, the support of a previously broken descending triangle seen in the daily chart.
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The daily chart shows that price is holding above a consolidation range between April and May. The RSI was showing a bullish divergence in the oversold area. These are signs that suggest a consolidation is ahead, and we are indeed seeing this consolidation over this past 2 sessions. However, when the RSI is back into neutral territory, there is still further downside, first toward the 420 low from May, then the 340 low on the year made in April.
Only a break above 550 should put this bearish outlook in trouble, and only a break above 600 should introduce a bullish outlook.
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