Trading on the fourth of July began at $2,569.53 and was rather uneventful. Even so, there was still an 11.15% run-up from the new Monday weekly low of $2,374.34 up to $2,639.47, this week’s new high. $2,374.34 is a very interesting level to watch, since it may reprise its role as a future support should a new reversal begin. Volume on Bitstamp is in a slow but steady decline. The same can also be said for other major bitcoin exchanges such as Kraken and OKCoin too.
Multiple trend lines appear to be intersecting at $2,640.92, which is also slightly above $2,639.47, the weekly high. A new bull run can only be considered an option, once there is intense trading above these two key price points.
The current dip in price is slowly creeping closer to $2,521.04, our first support level. Additional supports are in play at $2,472.43, $2,415.89, $2,315.63, $2,303.91, and at the $2,374.34 weekly low, which is also serving as a strong point of defense for the ongoing trading range. Anything below this price can be taken as strong evidence of an incoming prolonged correction, especially considering that it is the middle of the summer, when most traders pull out of the market to focus on rest or leisure.
A breakdown below the 200-day moving average can additionally be considered a bearish sign, the same applies to the 200-day volume weighted MA, which appears to be overlapping rather conveniently with the previously mentioned indicator. A significant drop of the 30-day MA below the 200-day MA will definitely confirm a bearish crossover, further establishing and conclusively sealing downward momentum.
Furthermore, certain Fibonacci levels have shown to be in close proximity to secondary support levels. The 0.236 fib ($2,407.91) is very near the $2,415.89 support, the same applies to 0.382 fib ($2,480.56) which almost overlaps with the $2,473.17 support level. Likewise, the 200-day MA and 200-day seem to be dancing around the 0.5 fib line ($2,539.27), which could conceivable prove to be a converging point of interest in the short and medium term.
The Bollinger bands have tightened in the last few days as well. This is almost always a sign of incoming volatility, and when combined with the slight drop below the lower band, points to likely bearish sentiment moving forward. If the bands expand further, traders should prepare for a more dynamic trading range.
RSI appears to be mostly oversold at the moment, but seems to be following the existing price trend and overall market movement. No lasting or substantial divergence with the Williams %R indicator, which is also mirroring RSI performance for now. The same is true for the MACD, no immediate or obvious divergence in relation to the total market trading or price fluctuations. OBV is also in alignment and is dropping along steadily with the gradually falling trading volume.