Bitcoin Analysis: At record highs, but bearish money flow divergence noted

Omkar Godbole FXStreet Contributor

Bitcoin [BTC] climbed 16% over the weekend to a fresh life time high of $3360 levels as the initial interest in the newly created Bitcoin Cash [BCC] declined. The good news for the BTC doesn’t stop there. The market capitalization jumped above $50 billion for the first time.

As per coinmarketcap.com, BTC currently trades around $3230 levels; up 1.63% in the last 24 hours. Ethereum trades around $261.82 levels; up 2.77%. BCC, whose prices hit a low of $205 now trades around $253 levels. The total market capitalization of the crypto currencies stands at $113.70 billion. The BTC dominance rate is 47%.

Technicals - Sideways to bearish action likely in the short-term

Daily chart

Resistance - We are operating at record highs… uncharted territory.

$3360

$3812.96 [100% Fib extension level]

Support

$3058.30 [61.8% Fib extension level]

$2946 [July 21 high] - $2920 [June 6 high]

2900 [symmetrical triangle ceiling]

Observations

Symmetrical triangle breakout - Bullish continuation pattern
Bullish RSI is nearing overbought territory
Bearish money flow index divergence

View

The bearish money flow index divergence suggests potential for a pull back, although fresh bids are seen around $3058 levels, given the broader outlook remains bullish, courtesy of the symmetrical triangle breakout.
In the short-term, sideways to bearish action is likely.
On a larger scheme of things, the virtual currency looks set to test $3812.96 levels.
Only an end of the day close below $2900 would revive the bearish view.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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