Bitcoin in Bearish Continuation after the FOMC Event
Bitcoin is continuing a downtrend that accelerated this week. The 4H chart shows a market that has been sliding, holding below the 200-, 100-, and 50-period SMAs for the most part. The 4H RSI also held below 60 showing persistent bearish momentum. Bitcoin started the week coming of a sideways market in the previous week. However, after retreating from 480, it fell to the 456 September low and broke it after the FOMC statement and press conference which boosted the USD across the board. Then it broke below the August low of 442. After stalling briefly around 420, the April-May consolidation low, we saw bitcoin continue its downward path, breaking below 400.
Bitcoin BTCUSD 4H Chart 9/19
(click to enlarge)
Th 4H chart looks oversold with the RSI below 20, giving us a bullish divergence relative to price. If we see a pullback, we should expect some resistance around 420, where price stalled before. If 420 does not provide resistance, the 442-456 area might, especially if the 4H RSI is back around 60 again. The bearish outlook is dominant right now, and there is still further downside risk toward the 340 low on the year.
Litecoin in Gentler Decline
While bitcoin is falling sharply, litecoin is following suit but in a less dramatic manner. The 4H chart shows a market that was slightly bullish in September with price breaking above the cluster of 200-, 100-, and 50-period SMAs, and the 4H RSI tagging 70. However, this week, price fell below the SMAs, and the RSI fell to 20, showing a revival of bearish price bias and momentum. Price also broke below the 4.60 September low, so the next target will be the 3.33 August-low.
Litecoin (LTCUSD) 4H Chart 9/19
(click to enlarge)
As the week winds down, there is a bullish divergence between the RSI and price. If there is a pullback, a bearish market should keep price under 5.00. A break above 5.10 can introduce a bullish market or at least neutralize the bearish outlook. Otherwise, if price can hold below 5.00, there is still downside to 3.33, and even the 2.21 low on the year.
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