Follow through selling in the cryptocurrency after comments but stalls near the 100 hour MA.
The Saudi Prince Alwaleed said he expects bitcoin to "implode" and that it was "Enron in the making" in an interview on CNBC this morning.
The price was trading around the $5900 level when he made the comments. The price decline took the price down to a low of $5647. That was around the 100 hour MA at $5665 (see blue line in the chart above).
The failure to crack much below the 100 hour MA (and the rebound back above), will now have traders leaning against the level as a risk defining level. Stay above is more bullish. Move below and the 200 hour MA will be targeted. That MA comes in at 5552.42 currently (see green line in the chart above)
Drilling to the 5-minute chart below, cryptocurrency stalled at the high near the high form Friday. Holding that level gave sellers a reason to sell. The fall below the 100 and 200 bar MA on the 5-minute chart were another reason to sell. Finally, just before the comments, the pair retested those MA levels and found sellers.
So technically, the price action and tools applied to that price action already had a bearish bias. Should sellers keep control (i.e. if the price moves back below the 100 hour MA at $5665), the $5600 and the 50% of the move up from the October 18th low at $5587.42 will be the next key targets to get to and through.
On a corrective move higher, the 100 bar MA on the 5-minute chart will be eyed as resistance. It is at $5830.57 currently (blue line in the chart below) and moving lower. Stay below will set the boundaries for the buyers and sellers to battle ($5830 above and $5665.97 below).
As mentioned in previous posts, trading the crytocurrency requires paying attention to the technicals. The volatility is just too great. So the smart traders out there in cryptotrading, will tend to define and limit risk against key technical levels. To ignore the clues opens yourself up to potentially big swings.
So be careful. Be disciplined and listen to what "the market" is saying
