Bitcoin: SMA200 holds the Market. What’s Next?
Bitcoin / U.S. dollar BITSTAMP:BTCUSD
In this post, I would like to add more details oriented to the short and medium term. I use the 1H chart and Moving Averages with 100 and 200 periods.
The price broke SMA100, and it was the 1st bearish signal telling us about a possible trend reversal. The same goes for the breakout below 7380.00 support level . These two signals could be used for confirmation of the trend reversal. But I use SMA200 as the main trend line , and for me, the breakout above or below this line will give confirmation for a trend reversal.
The price reached SMA200, and we can see two attempts to break this important trend line . Sellers failed. We got a new support level at 7235.00, and the zone formed by this level and SMA200.
Now we have to watch for the price action in this zone. The price reversal will give a buy opportunity and confirm the upward movement to the nearest resistance levels. If the price breaks this support zone , we will move to 6850.00 and 6500.00 support levels. If we see that the price is going to reverse from one of this support, it will give us another interesting buy opportunity.
DMI indicator tells us about the bearish trend , but ADX line falls. It is the signal that sellers are not so strong now, and probably they won’t have the power to break the support zone . If so, the price reversal looks logical in this situation. Let’s see how the market will move during the next several days.
Source: TW DLavrov