Bitcoin (BTCUSD) 1H Chart 3/25; click to enlarge
Bitcoin fell to about 236 during the 3/25 session before rebounding. The 1H RSI showed a bullish divergence, which was followed by the bullish correction. The correction stalled at 250, which was shorter then yesterday’s resistance pivot near 253. Meanwhile, the corresponding RSI high was higher. This condition is call the “negative reversal” signal, coined by the RSI guru Andrew Cardwell.
The negative reversal suggests further downside, at least in the 1H, near-term, intra-session time-frame as we get ready for the 3/26 session. Now, if price fails to clear below 240 and climbs back above 253, we would have an inverted head and shoulders pattern, which would suggest at least a near-term bullish attempt to test the resolve of the bearish breakout earlier in the week. If price can still hold under the 260 area, the bearish outlook would still be in play. Above 265, btcusd would be above the cluster of 200-, 100-, and 50-hour SMAs, which would make the technical picture slightly bullish and keep BTCUSD in a consolidation mode instead of a bearish one.
Let’s take a look at the 4H chart, and price action going back to January when btcusd made a low on the year near 167.
Bitcoin (BTCUSD) 4H Chart 3/25
(click to enlarge)
The 4H chart shows that after the consolidation from the end of January through the beginning of March, bitcoin has revived the bearish outlook with price trading under the 200-, 100-, and 50-period SMAs and the RSI tagging below 30 while holding below 60.
We can also see that if the bearish outlook does extend as suggested by the 1H chart, the next support below the 236 low will likely be in the 210-215 area. This was a common support during the first half of February. Below 210, then bitcoin would really open up the bearish outlook with the 167 low on the year in sight.
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