BTC/USD dropped to 3573 levels on Thurday before it closed at 3617 levels as it entered Ichimoku cloud. It is currently trading at 3648 levels at the time of writing (Bitstamp).

Ichimoku analysis of daily chart:

Tenkan Sen: 3547.35

Kijun Sen: 3975.95

On the upside, resistance is seen at 3730 (10-DMA) and a break above would target 3807 (55-EMA)/3888 (2h 50-SMA). Further strength would see it testing 3973 (trend line joining 4979.90 and 4679.97)/4051 (20-DMA)/4122 (September 18 high)/4212 (61.8% retracement of 4979.90 and 2972.01)/ 4300/4480 (August 17 high).

On the flipside, support is seen at 3600 (August 22 low) and a break below would drag the pair to 3548 (4h cloud bottom)/3500/3403 (100-EMA). Further weakness would drag it to 3291 (100-DMA)/3155 (Cloud bottom)/3105 (trend line joining 1830 and 2972.01).

Momentum studies: Bias appears bearish on the daily chart as the pair’s upside is being capped by 20-DMA. MACD line is below the signal line and RSI is weak at 42.

On the weekly chart, 10- and 20-SMA are biased higher. However, the pair is trading below 10-SMA and a close below would see further downside in the pair. RSI has rolled over from the overbought zone and stochs are biased lower.

Recommendation: Good to go short on decisive break below 3600. SL: 3975. TP: 3500/3400.

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