Bitcoin Technical Analysis for 02/29/2016 – Divergence Signaling Overbought Market?

The big resistance zone at $440 – which I outlined in my last Bitcoin technical analysis article – has now become even more important. This level has acted as resistance about five times since the 21st of February.

The 1-hour chart also shows that the bullish sentiment is starting to fade. The RSI indicator has been steady drifting lower, while price was still making new highs. This phenomenon is known as divergence and this divergence has been building since yesterday. Divergence very frequently precedes market reversals and is a leading indicator, not a lagging one!

I would also like to point out the significance of the $432.50 price level. This area acted as resistance about three times between the 26th and 27th. When price finally broken above this level on the 28th, $432.50 turned into support and sent the market higher. Since price is currently hovering around $435, this pivot will likely act as support to any potential sell-offs over the next few days. If price plunges underneath $432.50, I would not be surprised to see the market drop all the way down to $420.

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Disclaimer:  This is not trading/investment advice!

Image Source: 1

Chart source: https://www.okcoin.com

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Traderman

Avid blogger, entrepreneur, and cryptocurrency enthusiast. I love writing about cryptocurrency, NFTs, price analysis, and much more!

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