Bitcoin Price Analysis Dec.28: Sideways Done As BTC Breaks Down To Retest $3600

Yesterday we mentioned about the range Bitcoin was trading at for a couple of days: $3700 from below and $3850 from above.

We also mentioned that we expect a breakout to either direction very soon. As you all can see, Bitcoin broke down the $3700 level in its way to test the next resistance which lies at $3600.

So far, the significant support level of $3600 holds up. But, and as said before, the bearish momentum is not over yet. Hence, the chances of a break down are higher than those for a reversal here.

Looking at the 1-day & 4-hour charts

As expected in the case of breaking down the $3700 support, Bitcoin went down quickly to re-test the next significant support level at $3600.
Breaking down the $3600 and Bitcoin is likely to retest the $3480 support level, $3400 and the strong support at $3300.
From above, $3700 is now a support-turned resistance level, along with the 200 days moving average line (marked in light green on the 4-hour chart). From above, the next resistance lies at $3850 – resistance along with 50 days moving average line (marked in purple).
Looking at the daily chart’s RSI: This is interesting. There is still more room for the RSI to go down untill reaching the ascending mid-term trendline on the RSI chart. That ascending line is crucial to hold as support for the long-term, as we see something called Negative Diversions: The asset, Bitcoin in the case, is going down while the RSI is going up at the same range. This might tell of a change in momentum for the longer period.
Stochastic RSI oscillator of the daily chart had recently crossed over at the overbought level; this oscillator supports the option of a retest of lower levels.
The trading volume is still relatively low, this is likely because of the holidays.
BitFinex’s open short positions had increased to 32.3K BTC. Yesterday the positions were at 31K, their monthly low.