Bitcoin RSI divergence. 15-minute chart. Potential long position

29 Mar 2018

Greetings.

After another steep price drop - there is an RSI divergence forming on the 15-minute chart.

This could indicate sellers losing momentum in the short term.

A cautious long position could be opened, since buyers could enter, now that selling momentum is decrasing.

However, panic sells-offs are strong, so it would be a good idea to take some profits early, if price reached the 0.236 fib and keep tight stop-losses.

Price is expected to go down even further longer term, but there might be a small rally before that happens, which this divergence could be an indicator of.

Keep in mind this is a risky idea, when market sentiment is very bearish and panic sell-offs are happening left, right and center.

29 Mar 2018

Not

Selling pressure remains strong. After the first chart was posted, there was a small price increase due to selling momentum decreasing.

It was fairly short lived however, and the sell-offs continued.

However, RSI divergence on the 15 minute chart is still present, and unless market enters a state of total panic, there could soon be a short term reversal with a small rally.

Updated chart posted below.

29 Mar 2018

Not

29 Mar 2018

Not

So its time for an update on this idea.

RSI divergence was quite clear when the chart was first posted, but this time the selling momentum continued after slowing down for a while.

I specifically wrote earlier, that this was a risky idea, because panic sell-offs could continue, which is excactly what happened this time.

Divergence still remains though on the 15-minute and 30-minute chart, and i am convinced there will be a temporary rally within the next 24 hours. But since the market is gripped in panic price could go even lower before that happens.

I am still aiming for a target around the .382 fib in the 7700 range for now. If price goes down even further i will have to adjust that target.

29 Mar 2018

Not

30 Mar 2018

Not

Final update and resumé: Now that we saw price movement unfold its very obvious that divergence was invalidated this time.

I wrote early on, that this was a risky idea, because of the market state. The market entered into a complete state of panic sell-offs shortly after going as low as the 6600 range.

Naturally with tight stop losses, or even stop-loss at breakeven, after price moved up some time after posting the chart, this should not be an issue, since stops should be hit with a small loss or even at breakeven.

So its fair to say, that this idea did not work out as planned.

Will look for divergence again, when market has settled.