Fan Yang
1
All posts from Fan Yang
Fan Yang in Fan Yang,

Bitcoin - Consolidation Range Breakout Pending

Bitcoin has been consolidating for the last couple of sessions. After traders found support at about 500, bitcoin started trading sideways with resistance at 525.

A break above 525 could introduce a period of larger consolidation for next week. It would clear above the small consolidation range, above this week's falling trendline and above the 50-hour simple moving average (SMA). 
Bitcoin 1h chart

(click to enlarge)

If price does break above 525, it will be in the context of a consolidation, and not a bullish reversal because the daily RSI is below 30, a sign of oversold condition. As soon as the RSI is back above 30, bitcoin will be vulnerable to being faded lower. The strong volume that accompanied this week's downswings suggest that we should indeed have a bearish outlook for the medium term. 
Bitcoin daily chart

(click to enlarge)

When the bearish trend continues, and price falls below 495, the level of support could in the 420-440 area, the lows in late April throughout mid-May.

Below 420, bitcoin would expose the 338-340 lows on the year.

A break above 600 might be needed to put away this bearish outlook.