Bitcoin Price Forecast: Early Stages of Retracement in Place

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Bitcoin further consolidates below resistance of the orange 50-Day MA. Also, nearby resistance is represented by the blue 8-Day MA, now at 64,845. The 8-Day line gave a bearish signal on Tuesday as it dropped below the 50-Day line. In addition, the purple 20-Day MA is threatening to fall below the 50-Day line as they are now touching.

If it does, an additional bearish indication will be given. These are signs of a developing downtrend that could see volatility increase. They follow a breakdown from a bullish pennant that has failed and instead triggered a bearish reversal. So far, the bearish indications have not produced much downside momentum. That could change soon, however.

Inside Day Sets Up Next Signals

Today, Thursday, is likely to end with an inside day. It can be used to identify the next bullish or bearish signal. A rise above today’s high of 64,210, at the time of this writing, is short-term bullish and can lead to a test of resistance. Potential resistance might be seen at the 8-Day MA at 64,845, or the 50/20-Day MAs around 67,313 as far as moving averages go.

Also, this week’s resistance so far was 66,929 and could be resistance again. It is interesting to note that on the weekly chart (not shown) Bitcoin tested resistance around the longer 8-Week MA this week and price was rejected to the downside. In other words, resistance is identified at the week’s high and the 8-Week line, now at 67,175.

Downside Potential

On the downside, a bearish signal will be given on a drop below today’s low of 60,816. That is when sellers may start to get more aggressive. Further still on a drop below this week’s low Wednesday’s low of 59,648. The first identified support zone below this week’s low is around 56,159. That price level is identified I two ways. It is the 50% retracement of the upswing beginning from the January swing low and the completion of an extended bearish ABCD pattern. Rather than matching by 100%, the CD leg of the decline targets extends the AB drop in price by the 127.2% Fibonacci ratio.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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