BTC/USD dropped to 3720 levels on Wednesday, continuing its downtrend from past couple of sessions. It is currently trading at 3800 levels (Bitstamp).
Ichimoku analysis of daily chart:
Tenkan Sen: 4199.99
Kijun Sen: 4289.95
On the upside, resistance is seen at 3889 (50-DMA) and a break above would target 3945 (2h 20-SMA)/4054 (5-DMA). Further strength would see the pair testing 4118 (1h 100-SMA)/4208 (1w 5-SMA)/4252 (10-DMA)/4392 (20-DMA).
On the downside, support is seen at 3776 (38.2% retracement of 1830 and 4979.90) and a break below would see it testing 3687 (convergence of trend line joining 4058 and 3720 and Cloud top)/ 3600 (August 22 low)/3573 (1w 10-SMA). Further weakness would target 3500/3447 (90-EMA)/3404 (50% retracement of 1830 and 4979.90).
Momentum studies: Bias remains bearish on the daily chart as the pair broke below 50-DMA. RSI is weak at 37, MACD line is below the signal line, and stochs are in the oversold sold.
Weakness could also be seen on the weekly chart as stochs and RSI are on the verge of a rollover from the overbought levels.
Call Update: We recommended going short in our previous call. The pair has hit two targets
Recommendation: Bias lower, stay short. SL: 4050. TP: 3687.
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