Our analysis of yesterday was confirmed and yesterday’s bullish momentum turned into a bull trap, which may indicate that Bitcoin is ready to go toward the target area of $ 8400.
This is the analysis of the BTC looking at today’s market trend.
– Confirmed Bull Trap
– It’s down to $ 8,400?
– Level of resistance at US $ 11,200
Beginning with the 15-minute chart and an eye on momentum, we can see that yesterday the RSI dropped out of the trend on 3 occasions before returning to trend.
This indicated that BTC was overextended and that the price would fall as soon as the momentum returned to below the downtrend.
Analyzing the current price action, we can identify another trap that forms in the RSI. Once again above the downtrend. On the chart above, you can see that the green candle is almost reaching the bearish line, indicating that the price is close to the resistance.
The RSI confirms this possibility, since it is approaching level 50 of the RSI. As we know, during a downtrend, the RSI level 50 acts as resistance to momentum . If we compare previous occasions with the current price action, we can predict what to expect next. Once the buying pressure runs out, we should see the BTC return to the bearish trend and reach an area of $8400.
We also saw no divergence for this bearish trend, indicating that this decline has not yet ended. For divergence to form, BTC would need to make a lower price decrease and a lower high in the RSI. This will indicate that the price is oversold, since the momentum does not agree with the price.
With most indicators pointing to a low, we believe that the $ 11,200 is the main level of resistance today. If the price is able to exceed this level and stay above it, it will indicate that Bitcoin is ready to reach new highs.
Do you agree that Bitcoin will complete the downtrend and reach $ 8,400 or is the BTC ready to exit this bearish trend? Leave your comment below!