BTC/USD opened with a positive gap on Monday, breaking above the resistance (now turned into support) barrier of 7150. However, it hit resistance near 7315 and then it retreated. The price structure remains of higher peaks and higher troughs above the uptrend line drawn from the low of the 14th of August and thus, we would consider the near-term outlook to still be positive.
If the bulls prove strong enough to take charge again soon and push the price above 7315, then we may see them driving the battle towards our next resistance hurdle of 7550. However, before the next positive leg, we see the case for the current corrective setback to continue for a while more. A break back below 7150 could confirm the case for further retreat and could aim for a test near the aforementioned uptrend line.
That view is derived from our momentum studies. The RSI turned down and fell back below its 70 line, while the MACD, although above both its zero and trigger lines, has started to top and could fall below its trigger line soon. What’s more, there is negative divergence between both these indicators and the price action.
Having said all these though, we would like to see a clear dip below 6870 before we start examining whether the bulls have abandoned the battlefield. Such a dip may confirm the break below the short-term uptrend line and could initially aim for the 6550 territory. Another move below 6550 could carry larger bearish implications and may pave the way towards the 6210 area.
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