Bitcoin price: Will the rally ‘reverse’?

The price of Bitcoin has broken through the market highs of $280 and 1740 yuan in a typical jumping action. Currently, a downward wave has taken the price below $270 and it looks like it will continue to fall. Xbt.social technical analysts carefully reviewed the recent price fluctuations and various indicators.

Bitcoin Price Analysis

Bitfinex 1-hour chart

~From xbt.social's report earlier today:

Yesterday’s uptrend broke through the nearby highs of $280 and 1,740 CNY before falling below the 1-hour 20-period moving average. This decline may be a prelude to another uptrend, and of course it may fall to $250 or lower.

Traders who had selected a dynamic stop loss would have seen their trade executed close to $270 a few hours ago.

Note that the wave has broken the MACD and RSI regular divergence (magenta) which does not correspond to the previous instance of reverse divergence (blue) - a typical sign of the final sub-wave of an uptrend and subsequent reversal.

Friends who want to better understand the connotation of divergence and reverse divergence indicators can read the "Divergence" chapter in xbt.social's Trading 200 module.

Based on the correction pattern of the previous wave, we can now expect the market price to test the lower limit in a third wave decline. In the next few hours or days, whether a correction or a larger decline will occur, we should see the price retest the 10% containment line of the 100-period moving average of the daily chart around $262.