by Jamie Holmes
After reaching our target of $560, BTC-USD managed to post a fresh low at $554.90 and has since bounced higher. The current price on the Bitstamp exchange is $573.23, slightly up on today’s open. The outlook remains quite balanced, slightly leaning toward the upside.
The chart below illustrates the 4-hour price action for BTC-USD. The immediate trend is sideways suggesting bulls and bears are matched at present. The price of bitcoin is currently below the Ichimoku cloud which is providing a resistance zone around $570-$580. A break above the cloud will necessitate a bullish outlook. This is displayed on the chart below with the yellow ray just above $580. Buy limit orders could be placed here to take advantage of a bullish breakout. Given the market manages to move above the cloud, $600 would come into sight again.
Momentum is leaning more to the upside than the downside. This is indicated by the conversion line (blue) which has recently moved above the base line (red). The conversion line should provide support going forward, currently at $571.94. A close below the conversion line will point to possible downside moves. Furthermore, the Awesome Oscillator is trending higher and looks to move above the zero threshold, which will give further bullish confirmation.
The most recent fractal buy level provides support at $568.79 and further extension to the downside is expected if the market breaches below this level. The market will then look to test the recent low at $554.90. However, momentum and volume are both looking relatively bullish, with the most recent session seeing increased volume foretelling a move higher for BTC-USD over the next day or so.
The longer-term outlook is displayed below with the daily price action. The market is currently wedged between the conversion line, providing resistance at $578.95, and the base line which will be an important support level at $565.14. Therefore, going forward if today’s closing price is higher than $578.95, we should see bullish momentum renewed and the market to tend toward $600 and $660 (resistance provided by the Ichimoku cloud). However, if we see a daily close below $565.14, we should see the market break below the fractal support at $554.90 and move toward the recent low at $465.28.
Momentum as signalled by the Awesome Oscillator, has not changed much from yesterday but remains negative and red. However, the conversion and base lines of the Ichimoku indicator are suggesting bullish momentum, which will be further confirmed once the conversion line starts to trend higher.
The chart below shows the Renko candles for BTC-USD and suggests the long-term downtrend is starting to reverse. The market is now starting to form a bullish Renko candle after moving above $573.58 and a trend reversal will be confirmed once the market reaches $594.42, that is once a bullish Renko candle has fully formed. BTC-USD has to remain above $573.58 for the bullish outlook to remain intact. Important resistances will be found at $615.26 and $698.92.
However, if the market dips back below $583.58, we suggest to wait for a bearish breakout to enter into a sell position. A break below $552.74 will validate a bearish outlook over the long term and would see the market tend toward $448.54.
BUY BTC-USD @ $579.80; Stop Loss @ $568.79; Take Profit @ $615.26
SELL BTC-USD @ $552.74; Stop Loss @ $573.58; Take Profit @ $470.06