CoinDesk analysis
On CoinDesk, Omkar Godpole gives his analysis of the price movement of Bitcoin (BTC) last updated at 15:48 November 22 UTC. Godpole suggests that the stalled Bitcoin rally recovery could start again should prices go over the resistance level of $4,600. The price of the leading coin by market cap picked up bids yesterday as it approached a 14-month low near $4,000. There were record oversold conditions according to the 14-day relative strength index (RSI).
However, as Godpole’s article went to press BTC was trading on Bitstamp at just $4,460 which is down 3.76 percent from its high yesterday of $4,635. The probability of a further sell-off is low as the RSI on both daily and 3-day charts is still registering oversold positions.
If the price clears $4,635 again the odds of extending the recovery rally would much improve.
Chart analysis
$4,635 was the high of yesterday’s “bullish inside-day” candle. Such a candle is a sign of an indecisive market. An inside-day candle happens when the daily price of a coin falls within the price range of the day before. Yesterday’s price range, the high minus the low, represented by the green candle falls within the trading range of the day before , Tuesday. The market could see a trend continuation or reversal afterwards.
If the price of BTC finds acceptance of the $4,635 level within the next couple of days this would confirm a bullish reversal. However, if the price goes below $4,242 the previous day’s low this would imply the downward trend would continue.
However, Godpole thinks that there will be a bullish reversal since the candle pattern appeared at the bottom of the recent sell-off and the RSI is still indicating oversold conditions. Godpole maintains that a short term bearish continuation could mean a short term bear trap.
The 5 and 1-day exponential moving averages (EMA) are located at $4,722 and $5,103 respectively and are still on the decline. BTC may find it difficult to reach any gains above the level of $5,000.
Godpole’s outlook
Based on his technical analysis, Godpole’s view is: “An inside-day bullish reversal could be seen in the next day or two. The immediate upside, however, could be capped around $5,000. An inside-day bearish continuation could turn out to be a bear trap, as the cryptocurrency is still looking oversold. A weekly close below $4,182 (200-week EMA) would revive the bearish view and open up downside toward the next major support located at $3,100 (200-week simple moving average).”
Present situation
About 24 hours ago BTC was trading at $4,525. Since that time it hit a high of $4,591 and a low of $4,233. The price has gone marginally below the $4,242 level noted by Godpole but did not remain there. At 18:55 Central Standard Time BTC was at $4,275 down about $250 dollars over a 24-hour period or over 5.5 percent. There are no bullish signs so far but perhaps if it is a bear trap as Godpole suggests it might be, there will be a turnaround in the near future. The present price of BTC can be found here.
