by Jamie Holmes
Bitcoin is little changed on today’s opening price, up 0.61% currently trading at $445.70 on the BitStamp exchange. The 4-hour chart below illustrates bullish dominance throughout the most recent trading sessions, but this move could be running out of steam as indicated by the fractal sell level formed recently at $446.37. The most recent session displays a doji candlestick which indicates indecision among market participants and could foretell a change in trend. Moreover, the price action is testing the resistance area indicated by the Ichimoku cloud. Therefore we could see the market tend toward the support levels at the conversion (blue) line, base (dark-red) line and fractal support at $435.00.
Currently the conversion line offers minor support at $443.18; a 4-hour session close below the conversion line will indicate bearish momentum. After this level, the base line offers support at $440.68 presently. If this level fails to hold as support then further bearish momentum is anticipated. The fractal support at $435 will be a key level to watch going forward and could the area where a downward trend may finish. If this level is broken then this will open up fractal supports at $424.24 and $412.00. The best strategy at this moment is to ride the downward trend that will soon gain momentum; this is indicated by the downward cross-over in the MACD indicator at the bottom of the chart below.
The shorter-term outlook is displayed below by the hourly price action in BTC-USD. The most recently close shows a strong bearish candlestick; the market closed below the conversion line, providing a weak bearish signal. This suggests that there is a high likelihood that the price action will tend toward support provided by the Ichimoku cloud. This area lies around $440 for the immediate hours ahead. A close below the base line will give further bearish confirmation. If the Ichimoku cloud fails to hold as a support zone then the market will look to target fractal supports at $437.20 and $435.
On the other hand, a bullish outlook will be validated if the market manages to close back above the conversion line, currently offering minor resistance at $444.89. This would open up fractal resistance at $446.21 and a test of the psychological $450 level. The MACD indicates that the immediate momentum is bullish as the histogram is trending higher. Bullish confirmation will be given when the MACD displays an upward cross-over and the histogram returns to positive territory.