Bitcoin is currently rejecting moves lower but there is still time

Rajan Dhall, MSTA FX Daily

After the break of the pennant formation two days ago, BTC/USD has stalled at a key support level. Although there was a fair amount of volume on the break lower – as you can see on the far-right arrow marked on the bottom of the 4-hour chart – it hasn’t been followed up with much conviction and the volume tailed off at the support zone.

11,112.21 was used twice as a firm resistance point in mid-July and as the last consolidation support earlier in the month. It seems that if the bears want to take control of this market, the level would need to be broken with some decent strength. The stochastic indicator retraced somewhat and looks to be gearing for another move down as it has had another bearish crossover of the K and D lines.

The volume indicator at the bottom of the chart highlights how much volume is needed for a decent price level break. The bearish pennant pattern break had a volume level of around 5.02k contracts over the 4-hour period on the Coinbase exchange. The two other breaks marked by the arrows had over 7k contracts traded over the same time period, so it may be worthwhile to keep an eye on the volume as we break lower, if indeed we do.