ANALYSIS: ASIAN TRADING SESSION PULLS THE BITCOIN PRICE UP

The Asian trading session has pulled price up from last night’s lows near $470. There are still few clues as to where price is heading, but at least one more low is expected as the analysis below explains.
Descending Channel
As identified in yesterday’s analysis a descending channel has contained price action for 11 days running. Price has respected the lower channel trendline since first hitting it during trade on Sunday 31 August. This trendline is currently overlapping with the 0.618 Fibonacci retracement level of the entire advance from April to June, and that implies strong support at current levels.
Ordinarily one would expect price to react by bouncing away from strong support. However, the little bounce that did occur has caused the MACD indicator (hourly chart) to indicate reverse divergence – a strong signal that at least one more low is in store. The reverse divergence between price and MACD is marked with dashed magenta lines on the chart above.

This post was published at Crypto Coins News on 02/09/2014.