Bitcoin has had a forgettable start to this year as the value of the digital currency dropped from a peak of $465 to the current value of $376.67. The staggering 20% drop in less than a month has shaken the confidence of a majority of traders. They can only take heart from the fact that high volatility is a part of trading cryptocurrencies.
Upon taking a look at the Bitcoin-Dollar 240-minute price chart, taken from TradingView.com, one is bound to see a steady downtrend.
Downward Sloping Resistance
Bitcoin bulls have been fighting consistent selling pressure near certain levels, now marked by the downward sloping resistance line. According to this technical parameter, the cryptocurrency might witness a fresh bout of short selling near $380.
Bitcoin recently attempted to nudge above the trendline but soon broke down. Since then, it has been trying hard to sustain at current levels.
Cluster of Moving Averages Capping Upside
A couple of moving averages i.e. the 10-4h and the 20-4h SMA of $377.5830 and $377.9529 are limiting the upside. Bitcoin has barely budged as it tackles these moving averages.
Money Flow Index
The 14-4h MFI is showing a dip in its value as bulls become cautious of another breakdown. The latest MFI value is 33.5433. Value at or below 20 suggests oversold condition.
Moving Average Convergence Divergence
That not all is lost for Bitcoin can be ascertained from the current Histogram value of 0.6305. The value of MACD is -2.6815.
Relative Strength Index
The RSI, being directional in nature, fails to provide any clues regarding the future course of action. The value is relatively flat from yesterday at 37.8243.
Market participants can position themselves for another round of selling when this consolidation comes to an end. Renewed buying can only be expected above $385.
Having said that, the level of $350 is crucial for the bulls. Breaching this level will result in a huge win for the bears.