Bitcoin Price Analysis: Range Bound Within Continuous Downtrend (Week of APR 26)

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The Bitcoin price continues its long steady decline, but has been range bound within a larger decline. This has been a tricky place as the price has whipsawed around. This happens when price heads in one direction, but then is followed quickly by a movement in the opposite direction.

The price started the week at US$224 and while we expected the price to go down and test the US$210 and then US$200 levels, it instead went up to US$240, breaking through some minor resistance levels before heading back down and hitting near our $210 level, where it has bounced off support and is, at the time of writing, at US$225.

Nothing has changed as far as the trend goes: Bitcoin remains in a primary downtrend. The rallies are getting weaker and it is still our belief that the US$200 level will be tested and if it does not hold, the lows of $152 will come into play.

Long-Term

The 1-year chart (long-term) of Bitcoin remains bearish. The price continues to decline, and remains below all 3 of its Exponential Moving Averages (EMAs). The 50-day EMA will continue to be a major resistance area and right now, that is approximately at ~US$242.

Also note that the slopes of all 3 EMAs are bending downwards as well. This is symptomatic of falling prices that are not ready to rise and if they can continue to slope downwards, the price will follow, which can lead to an accelerated downtrend.

Interestingly, the MFI has turned up and is diverging from price and RSI and MACD. The RSI remains flat to down, which doesn’t show much strength or conviction that the price will move up, and the MACD is relatively flat below 0 confirming this view.

This is common of range-bound trading. The price is exhibiting very little signs of strength and for now, the signs of weakening have abated. In other words, this is no man’s land.

-- ICHIMOKU

Not much has changed in the Ichimoku charts. The 1-year Ichimoku (cloud chart) continues confirming this bearish scenario.

The price is below the cloud, which is bearish. The cloud is resistance and the lower bound of the cloud is at ~US$257.

What is more disturbing is the cloud in front of the price, which is 26 days in the future. It is future resistance and it is at ~US$228. That cloud had a bearish crossover and is predicting lower prices in the future. The cloud continues to descend, pressuring the price.

Aside from the price below the cloud, the Chikou Span (Lagging Line) is below the cloud, along with the Tankan Sen (Conversion Line) and the Kijun Sen (Base Line), which are steeply sloped downward, confirming the bearish price outlook.

Meanwhile, nothing in the Ichimoku chart shows signs of an imminent reversal. For further definitions of what is being discussed, please refer to this previous post on Ichimoku cloud charts.

Intermediate-Term Trend

Using Fibonacci retracements from an intermediate-term price high of US$427 recorded in mid-November, we see that the price is right below resistance at ~USD $231.

The US$210 level continues to be support and should be retested. The RSI and MACD are both flat and are confirming the aforementioned range-bound trading.

I also have the Directional Movement Index, which looks at buying and selling pressures. The blue line indicates buying pressure, the red line indicates selling pressure and the orange line is the ADX, which indicates the strength or weakness of a trend. 

As one can see, selling pressure is far above buying pressure, but starts to fall, and the ADX is at a high level but begins to flatten out. This continues to show that selling pressure still has the upper hand.

Buying Pressure (the blue line) is beginning to rise from low levels. This is typically what happens in range-bound trading. The Bitcoin price looks like it is getting stuck in this range, waiting to make a move.

Short-Term Trend

Looking at the short-term trend (April 23 high) using Fibonacci retracements, the short-term price trend is finding resistance at the .764 price level of US$231.

If it breaks below US$224, then US$220 and US$216, the short-term low of ~US$210 should provide support after being tested, as it was near the low of the latest move.

If this doesn’t hold, US$200 will certainly be tested. If the price can break above US$228 it could test ~US$231 as well as the short-term high of ~US$238. A higher price is just a countertrend move until proven otherwise and the resumption of the primary downtrend should continue.

The primary downtrend continues in full force. Broken support becomes resistance, meaning that if Bitcoin is to rally, there will be many resistance levels above that which will need to be broken through (Fibonacci levels) along with the moving averages, as well as Ichimoku.

Based on the weight of the evidence my feeling is a test of $200 could come soon.

Bitcoin has entered a period of range-bound trading. Watch key levels before putting a trade in. Right now, the price continues to whipsaw above and below. Be patient and wait for the price to tell you what to do.

Disclaimer: Articles regarding the potential movement in crypto-currency prices are not to be treated as trading advice. Neither Cointelegraph nor the Author assumes responsibility for any trade losses as the final decision on trade execution lies with the reader. Always remember that only those in possession of the private keys are in control of the money.