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Flimsy Floor? Bitcoin Charts Suggest Price Decline In Play
Nov 12, 2017 at 13:30 UTC | Updated Nov 13, 2017 at 13:00 UTC
Amid what has been a wild weekend in the crypto markets, BTC is now down just 5 percent in the last 24 hours to a value of $6,102. Yet, that number doesn't tell the whole story, as the cryptocurrency has been in the midst of heavy volatility after hitting a near three-week low below $5,600 earlier today.
As the charts show, As the charts show Ethereum Historical Price Graph ,000 now appears to have topped out at $7,850 last week after a decision to abandon a controversial software upgrade triggered an
. The move appears to be sparking a migration of funds to alternative protocols, with bitcoin cash emerging as the primary beneficiary –
yesterday. A high volume sell-off is often considered as a sign of "panic," and the fact that
revisited record highs further corroborates this view.
If history is any guide, the current sell-off in bitcoin is likely to run out of steam below $5,000.
The rally topped out after the confirmation of the bearish relative strength index (RSI) divergence.
The sell-off ended around (marked by a circle) – 61.8 percent Fibonacci retracement level ($2,988) and below the 100-day MA.
Again, the rally ended after the confirmation of the bearish relative strength index (RSI) divergence.
The price drop came to a halt around (marked by a circle) – 61.8 percent Fibonacci retracement level ($1,702) & below the 100-day MA. The RSI was oversold as well (marked by a circle).
The rally ends with a bearish price RSI divergence.
The sell-off comes to a halt around the 61.8 percent Fib and below the 100-day MA.
The current retreat in prices looks similar to Case I and Case II as the rally ended with a bearish price RSI divergence.
The RSI is trending lower and well short of the oversold territory. Thus, there is potential for a continued sell-off.
The sharp recovery from the 50-day MA seen today indicates bitcoin could trade sideways for the next couple of days before resuming the drop.
As historical data shows, the current sell-off is likely to leave a major higher low around the 61.8 percent Fibonacci retracement ($4,855.59) and below the 100-day MA ($4,818). Over the next few days, the 100-day MA is seen sloping upwards to $5,000-$5,100 range.
Prices could trade sideways over the next few days.
The current sell-off could come to a halt around $4,900-$5,000.
Only a multiple 1-hour closes above $6,500 would warrant caution on the part of the aggressive bears.
Price action discussed below could be considered as a sign of a bullish trend reversal:
A solid rebound from near 100-day MA & 61.8% Fibonacci retracement (as history suggests) or
The prices close today around $6,200 and tomorrow's candle ends beyond $6,900.
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