Bitcoin market shrouded in negativity

Currently, the Bitcoin market is correcting upwards on the price chart, but technical signs indicate that more downside is on the expected track. In any case, at least the current negative sentiment has not brought any buying orders, and as the intensity of negative sentiment increases, it will mean the possibility of a downward bottoming out over the weekend.

Bitcoin Price Analysis

BTC-China 1-hour chart (updated at 4am UTC on August 17)
 

The correction that started near yesterday's low is continuing. The last wave of decline created a divergence in the RSI indicator, thus, it forced the price to rise back up. Now, after making a lower high, the RSI indicator has begun to show a reverse divergence. Normally, this is a signal to expect a decline, but the price curve pattern in the figure shows that the market often compounded the divergence after exhausting all the upward momentum before approaching the cliff.

The same may happen at the present moment. Stochastic (above) has not yet formed a grouping in the overbought area; the upper Bollinger Band of the MACD indicator (bottom) has enough room. Technically, the correction may continue and even reach higher on the chart, accompanied by a negative divergence of the RSI indicator (second from the top), to the previous high, which is close to 1700 RMB ($268 - Bitfinex).

The decline will eventually continue until lower levels are set. Our target of $252 remains unchanged as it seems that negative sentiment is rampant in the Bitcoin ecosystem right now.

Of course, we know that this is a correction before a larger up move, and we will continue to look for signs of a reversal. The first sign that will confirm such signs will be when the price climbs above the green 20-period moving average and the red 200-period moving average on the exchange price chart. Until then, the market's outlook - like our mood - remains down.

Bitstamp 1-Hour

Chart (updated at 15:00 UTC on August 17)

 
There is no decisive low in sight on today’s chart, and attempts to pull higher were quickly smothered by selling orders.
The various signs in the chart do not give a strong expected direction, so we must remain patient and wait for this negative period to pass, and for this necessary problem in the history of Bitcoin development to be solved, and then the price curve can run smoothly. In the current climate, the downward trend is sought after, and this phenomenon seems to be more intense during US trading hours.

While prices are trading below the red 200-period moving average on the hourly chart, the outlook remains the same: biased to the downside.

The most pessimistic moment is the best time to buy, and the most optimistic moment is the best time to sell. - John Templeton

Summarize

The Bitcoin market, like all markets, is dominated by the mood of the community. Buying generally occurs in positive and hopeful moments. Negativity and uncertainty, like the current conflict over block size, often creates a fighting, divisive mood that leads to a rush for the exits. With this in mind, we retain a bearish outlook for the near-term market, although it could change quickly as negative sentiment often occurs at market bottoms. The technical signs for a market reversal have been given above, and we expect the market to find a bottom and signal a rally in the coming days and weeks.

Bitfinex Depth Chart and Bid/Ask Volume Monitor: