Bitcoin selling pressure increasing: The final BTC decline initiated

05 Jul, 2019
by Lourens Pepler
Price Analysis
Bitcoin selling pressure increasing: The final BTC decline initiated

With yesterday's breakout turning out to be a bull trap - we talk about it here - this could indicate that Bitcoin is ready to complete its final move down in this 3-drives-down retracement to our main target area of $8400. This is the BTC analysis for 5 June 2019.

Highlights:

- Bull trap confirmed

- Final push down to main target?

- $11200 resistance level

Starting with a 15min chart and looking at momentum, we can see that RSI pushed outside of trend on 3 occasions yesterday, before returning back to the trend. This indicated that BTC was overextended and that price would decline as soon as momentum returns back to the downtrend. 

BTC/USD chart provided by Tradingview

Now taking a look at current price action, we are able to spot another bull trap forming on RSI, since it is now once again outside of the downtrend. With price almost hitting the downward line we have, indicates that price near resistance. 

Looking at RSI confirms this, with it now hovering near 50 on RSI. As we know, during a downtrend, 50 RSI acts as resistance for momentum. If we copy over one of the previous occasions and plotting it over to current price action, could possibly tell us what to expect next. Once the buying pressure runs out of steam from this increase, we should see BTC return to the downtrend and make its way towards and area of $8400.

We have also not seen any divergence for this downtrend, indicating that this decline is not done yet. For divergence to form, BTC would need to make a lower low on price, but a higher lower on RSI. This will indicate that price is oversold, since momentum does not agree with price. 

BTC/USD chart provided by Tradingview

With most of our indicators pointing towards a decline, we believe that $11200 will be todays resistance level to watch. If this price is able to break past this level and keep support above it, could indicate that BTC is ready to move onto new highs.

BTC/USD chart provided by Tradingview

Do you agree that BTC must complete another push down, or is BTC ready to break out from this downtrend? Let us know what you think in the comments below!

Disclaimer: Keep in mind this not investment or trading advice, just the opinion of our analysts. As always, do your own research, make your own decisions.

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