BTC/USD broke below the trend line support joining 1830 and 4010 and hit 3890 levels so far in the day. It is currently trading at 3946 levels at the time of writing (Bitstamp).

Ichimoku analysis of daily chart:

Tenkan Sen: 4293.31

Kijun Sen: 4289.95

The pair’s upside is capped by 5-DMA (4188) and a consistent break above would see it testing 4315 (10-DMA)/4428 (20-DMA). Further strength would target 4480 (August 17 high)/4567 (61.8% retracement of 4979 and 3900)/4679/4679 (September 08 high)/4700.

On the downside, support is seen at 3865 (50-DMA) and a break below would see it testing 3776 (38.2% retracement of 1830 and 4979.90)/3667 (Cloud top). Further weakness would target 3600 (August 22 low)/3582 (1w 10-SMA)/3500/3418 (38.2% retracement of 891.33 and 4979.90)/3342 (100-EMA).

Momentum studies: Bias appears bearish on the daily chart as the pair broke below the trend line support. RSI is weak at 40, MACD line is below the signal line and stochs are in the oversold zone.

On the weekly chart, stochs are RSI are on the verge of a rollover from the overbought levels, and the pair is trading well below 5-SMA.

Recommendation: Good to sell on rallies around 3940. SL: 4050. TP: 3865/3776/3667.

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