BTC/USD Technical Analysis – 27th March 2014

Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator. Bitcoin approaches very close

Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.

Bitcoin approaches very close to its low of the past fortnight, at 555, and with many technicals indicating a break of this zone, there would have been a strong possibility of a break this week, was it not for one major caveat.

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Let’s take a closer look at the BTC/USD chart on H4 (click to expand):

btcusdh4_27_03_2014

We can see how the past few candles have been very bearish, with long, strong bodies. Also, right now, both Bill Williams’ Oscillators, namely the Accelerator Oscillator and the Awesome Oscillator have turned red. Finally we have the Stochastics crossing down, far from oversold territory.

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I would have been very confident of a break past 555 quite frankly, was it not for a major support line, which isn’t on the above chart. For that, we need to zoom out to the Weekly timeframe. Click below to expand:

btcusdweekly_27_03_2014

I’ve performed the Fibonacci study here from virtually the lowest point on Bitcoin, to the all time high, when it reached those crazy levels above 1000 back in late November last year.

Immediately, we can see why price will struggle to push beyond 550, as it’s the 50% retracement level (circled in blue). This is a major support/resistance area and right now, and really, it would be foolish to predict a drop beyond this point, unless there are even more powerful reasons for this to occur (e.g. major negative press for bitcoin).

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