Bitcoin prices are rising “with fear”

The price of Bitcoin has been pulled to a new high today, with profit taking starting to take place below $250 (Bitstamp) amid market nervousness. Technical analysis of the chart suggests that additional higher highs are imminent.

Bitcoin Price Analysis

Bitstamp 1-hour chart analysis (00:00, September 10, Beijing time)

Today's price lifted to a new corrective high as highlighted in red and this move has caused a divergence in the momentum indicator.

Typically, Bitcoin prices will enter a compound divergence cycle at this time, with upside divergences intertwined with downside reverse divergences. The current market pattern seems to be forming a downside divergence, with the RSI (top) making a lower low relative to the previous price fluctuations that made the market make a higher low.

This cycle will continue until the downside divergence on the RSI indicator disappears, at which point we will be signaled that a final high will follow. Whenever we see a downside reverse divergence followed by an upside regular divergence, we can expect additional new highs.

The upper target is still close to the 200-period moving average of the daily chart, which is $254 (Bitstamp). The price may also exceed the target point. However, we do not want to try to squeeze out every little bit of profit, but only seek to take profits while ensuring safety and grab the big head.

Patience is the key to success, not speed. --Jesse Livermore

Summarize

Nervous market sentiment is sometimes just a transition before the market regains confidence. In the current chart, it is possible that $250 has become a big barrier in everyone's subconscious mind, and there must be a lot of sell orders piled up at this level. Sometimes nervousness is a sign of an uncertain corrective rise and an imminent reversal. This may be the case in the current chart.

Bitfinex order depth chart and trading volume display: