BTC/USD plummeted to 3800 levels on Tuesday before it closed at 4155 levels. It continues trading in the red at 3991 levels at the time of writing (Bitstamp).

Ichimoku analysis of daily chart:

Tenkan Sen: 3789.36

Kijun Sen: 3400

On the upside, a break above 4130 (200% retracement of 2980 and 1830) would see the pair testing 4200/4270 (161.8% extension of 891.33 and 2980). Further strength would target 4300/4357 (161.8% extension of 751.34 and 2980)/4400 (August 15 high)/4454 (trend line joining 2980 and 4400)/4515 (161.8% extension of 1830 and 3490).

On the reverse side, the pair has found strong support near 3924 (7-DMA) and any violation would drag it to 3800 (August 15 low)/3765 (10-DMA)/3737 (1h 200-SMA). Further weakness would drag it to 3636 (38.2% retracement of 2400 and 4400)/3571 (23.6% retracement of 891.33 and 4400)/3500/3418.

Momentum studies: On the daily chart, RSI is at 71 with lower bias, while MACD line is above the signal line. However, major moving average remains biased higher. A break below 7-DMA, coupled with a roller of stochs and RSI from the overbought levels would see minor bearishness in the pair.

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest