The bitcoin price failed to rally last week despite key indicators being bullish. When price does not follow indicators, a breakdown is likely and that’s exactly what happened. Bitcoin price dropped below $440, ultimately settling in the low-$440s.
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Bitcoin Price Outlook for the Week Ahead
The two key short term support areas mentioned in our last price outlook - $447 and $440 - were broken over the past week and traders should expect more volatility in the near-term. The price is now fighting to find support in the $440 area, but this will be challenging.
There has been a negative crossover of the moving averages and they are pointing towards lower prices. Another bearish sign: the bitcoin price fell below the 50-day EMA last week for the first time since mid-March. The indicators looked to have put in a short-term bottom last week. However, what was once a key support level at $447 now becomes short-term resistance.
$443 is an important price level on long-term charts as this was the 50-day EMA that was taken out last week. $435 is now the most immediate support level with stronger support at $430. If these levels don’t hold, we could see a fast decline into major support between $415 - $420.
In short, there is currently a lot of overhead resistance. Without big buy-side volume coming into play, it will be a challenge to climb higher.
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*All data and references are current as of 4:00PM EST on 5/16/2016.