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January 29, 2015, 12:37:51 AM |
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After rising stupendously on Coinbase euphoria, the bitcoin market failed to sustain on and above its peak level - around $314 on Bitfinex. As a result, the price is now attempting bearish corrections while trading near a pre-spike level. Meanwhile, the trading volume has dropped by 100,000 BTC in over the last 24 hours.
The charts certainly indicate that the previous sharp rally was nothing but a price overreaction, where few rich traders took the Coinbase news as granted to create a bullish hype. They certainly dumped their coins when the price hit the peak, and the buying panic came to rest eventually.
January 28th Bitcoin Trading Session
The BTC/USD opened at around 258 on the 4H Bitfinex chart, floating right above its key support level around 255. For the first few hours, there was almost no movement in the market due to unsubstantial trading volume. But a few hours later we saw a huge dump take place that subsequently brought the price near the next support around 240. As you can see in the chart below, the price has clearly fallen into a selling channel and is now struggling to rebound amidst a huge selling pressure.
At press time, the BTC/USD is priced around 226
What to Expect Today?
The technical indicators on a 4H chart are predicting a neutral scenario for bitcoin. If we look at the chart above, there was a near-term bullish flag forming where the price was sandwiched between the 255-support and 275-resistance level. The trend however shifted towards bears after a series of huge sell offs, as a result, the price is struggling to float above the 240-support area.
The RSI has dropped near 40, clearing a selling area. Meanwhile, the MACD has also crashed below the signal line due to the heavy sell-offs in the last hours, marking it as the end of the previous bullish rally. The downward velocity is clearly visible, this may take price to lower 200s. Even after a strong rally this week, a bearish bias still haunts the bitcoin market. For now, just watch out for the 240 mark which could also initiate a short rally towards the prevailing resistance level around 265-275 area.
Conclusion (On Daily Charts)
Current Mood: Bearish
Moving Averages: Strong Sell (2 Buy 10 Sell)
Technical Indicators: Strong Buy (7 Buy 1 Sell 3 Neutral)
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