Home Crypto Bitcoin Selloff ensues after Bitcoin: USD/BTC (BTC=X) lost key support at $9,400

Selloff ensues after Bitcoin: USD/BTC (BTC=X) lost key support at $9,400

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Selloff ensues after Bitcoin: USD/BTC (BTC=X) lost key support at $9,400

The price of Bitcoin found resistance at the $10,400 level, after which a test of the $9,400 support was heavily needed. The $9,400 level was unable to provide sustainable support and as the price fell through it this caused a significant selloff throughout the crypto market.

The sell-off led to the next support area at $8,200-8,400 and many horizontal levels are lining up here, providing potential temporary support and space for a relief rally. 

However, for the short term, many believe that the upwards momentum is out of the markets as the price of Bitcoin is making a lower low (a key indicator for downwards momentum) on the daily timeframe. 

Does this mean that the entire crypto market will reverse course and enter a bearish trend? Not at all. The price of Bitcoin is still 27% higher as on the 1st of January, which makes Bitcoin one of the best-performing assets of the year. 

The bullish scenario for Bitcoin 

If the scenario turned bullish, a relief rally towards $9,200-9,400 would be the first step. To do this, Bitcoin price needs to find support at $8,250-$8,400 in order to sustain some upwards momentum to retest previous support levels for resistance.

The next important question investors will ask will be: Can Bitcoin price break through the resistance and continue its upward momentum? If the answer is no, a likely retest of the $8,200-$8,400 area is next to occur. 

However, breaking the resistance around $9,200-$9,400 and making it support would open the door for a move to the next levels near the $10,400 highs of two weeks ago. 

And finally, finding support around this area would confirm the 21-WMA to be supported again, which is a massive indicator for bull/bear momentum. 

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 9,271.29.

The projected lower bound is: 7,796.82.

The projected closing price is: 8,534.05.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 1 white candles and 9 black candles for a net of 8 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 28.7979. This is not an overbought or oversold reading. The last signal was a buy 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 34.20. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 18 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -104.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 10 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 16 period(s) ago.

Rex Takasugi – TD Profile

FOREX BTC= closed down -142.760 at 8,525.460. Volume was 53% below average (consolidating) and Bollinger Bands were 71% wider than normal.

Open     High      Low     Close     Volume___
8,491.1208,593.0008,304.1708,525.460 73,766
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 9,054.25 9,262.75 8,724.42
Volatility: 44 51 55
Volume: 295,477 206,318 114,826

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX BTC= is currently 2.3% below its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of BTC= (mildly bearish). Our trend forecasting oscillators are currently bearish on BTC= and have had this outlook for the last 10 periods.

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