by Jamie Holmes
BTC-USD has hardly moved from today’s open, down just 0.07% on the BitStamp exchange so far today. The chart below illustrates the long-term outlook with the 4-hour price action and shows the current price as $452.58. The price action is currently trading within the Ichimoku cloud; a break below the cloud, i.e. a move below $451.28, should see bearish momentum dominate.
Also, the conversion (blue) line is trending downward, suggesting that this will be the direction of the market. The most recent close was above the conversion line, suggesting it is now providing support at $451.59; we should see the market extend lower if there is a close below the conversion line. Bearish momentum is indicated at present as the base (dark-red) line is well above the conversion line. Furthermore, notice that the Ichimoku cloud is starting to turn red, a possible signal that the market will move lower over the long-term.
However, the MACD is indicating bullish momentum as the histogram is positive. Sellers should look for a downward cross-over in the moving averages of the MACD to signal a switch in momentum. The market could alternatively break out of the Ichimoku cloud to the upside and a bullish outlook would be validated in this case. A close above the base at $456.08 will give a neutral bullish signal and would also change the outlook over the longer-term; this would lead to the market testing fractal resistance at $458.32. A break of this level is key to test the recent highs around $470. Alternatively, a break of fractal support at $448.88 should see bears take control of the market and test the recent low of $435.
The shorter-term outlook is displayed below by the hourly price action. The market is below the Ichimoku cloud, suggesting that short-term control of the market lies in the hands of the sellers. However, recently a weak bullish signal has been given with the conversion line moving above the base line. Bullish momentum is also indicated by the MACD. Therefore, we should look to buy BTC-USD if the market manages to break above the Ichimoku cloud, i.e. above $456.08.
The most recent fractal levels are also indicated on the chart below highlighting critical support and resistance levels going forward. A break above $453.93 should see bullish momentum dominate, whereas a break below $450.14 should see downward pressure dominate. Sellers should also look for an hourly close of the market below the conversion line which is currently offering support at $452.03.