Omkar Godbole has his usual daily analysis of Bitcoin’s (BTC) price movements. His last update was at 11:36 UTC January 9. Godbole claims that since the BTC market is showing signs of indecision the price could soon decline below the $4,000 level. Yesterday, Bitcoin was both up and down but ended up with little change around $3,995 on the Bitstamp exchange.
Tuesday BTC formed a doji candle, a sign usually considered as showing indecision in the market. This happened even though there was also a bull flag breakout that many thought had set the stage for a move above $4,300 but it failed to happen. The doji candle appeared at the top of the recent recovery rally and close to the key resistance level of $4,100 indicating that the bullish trend was exhausted.
The bears consequently could make somewhat of a comeback, especially if buyers are unable to keep the price above the previous day’s low of $3,934. As Godbole’s article went to press BTC was at $4,010 on Bitstamp a gain of just 0.80 percent over twenty four hours.
The daily chart shows that BTC has formed a doji candle that is at the confluence of the 50-day exponential moving average (EMA) and the inverse head-and-shoulders neckline resistance. If BTC confirms a bearish doji reversal by closing below $3,934 this would make it unlikely that there would be a bull breakout above the $4,130 level. A drop towards $3,566 would indicate that the inverse head-and-shoulders failure was a strong bearish signal. The bulls need a close on the day, UTC close above $4,130 to confirm an inverse head-and-shoulders breakout in order to open the way for a stronger trend up.
The four hour chart showed a bull flag breakout yesterday, that showed a resumption of the recovery rally from the January 6 low of $3,753. However, so far there has been no break through the $4,130 resistance level. However, for now, the bull flag pattern is still in play and will lose credibility only below the previous day’s low of $3,934.
Given his analysis Godbole believes: “Bullish exhaustion seen at the key hurdle above $4,100 could embolden the bears. A UTC close below $3,934 could yield a drop to $3,566 (Dec. 27 low). A break below that level would violate the bullish-higher low pattern and expose the December low of $3,122. On the higher side, $4,130 is the level to beat for the bulls. An inverse head-and-shoulders breakout, if confirmed, would invalidate yesterday’s doji and open up upside towards the psychological hurdle of $5,000.
Bitcoin is trading in an exceedingly narrow range, perhaps consolidating before it moves one way or the other. It has not managed to test resistance levels either upwards or downwards. It opened 24 hours ago at $3,986 and had a low of $3,965 and a high of just $4,023. At 18:10 Central Standard Time it was just at $4,002 barely above the $4,000 mark. The present price of Bitcoin can be found here.