On the 4 hourly chart. BTC is developing into a rising wedge with higher highs and low accompanied with decreasing volume.
Considering the larger picture, current price level of BTC compared to ATH is between the 0.236 and the 0.382 level, which would indicate the wedge formation to be a valid concern.
Secondary concern is the bearish divergence forming with lower highs on the RSI forming a divergence versus price action.
If BTC were to close below 39k on the 4 hourly candle (or a daily candle). We should expect price to retrace swiftly to the 36k level.
To be honest, I have no idea what may happen after that. Lets see if the retrace happens first. : )
Considering the larger picture, current price level of BTC compared to ATH is between the 0.236 and the 0.382 level, which would indicate the wedge formation to be a valid concern.
Secondary concern is the bearish divergence forming with lower highs on the RSI forming a divergence versus price action.
If BTC were to close below 39k on the 4 hourly candle (or a daily candle). We should expect price to retrace swiftly to the 36k level.
To be honest, I have no idea what may happen after that. Lets see if the retrace happens first. : )
Comment:
**Correction: The lower support line of the rising wedge coincides with the 50 HOURLY moving average.
Comment:
At 10am Singapore time (GMT +8), BTC continues to develop within the rising wedge. I have since redrawn the lower support line based on the price development over the past few hours.
The resulting change is that while BTC continues to be in a rising wedge, the original trend lines were too narrow and thus I prematurely called the apex.
Based on the current pattern, BTC is continue climbing up slowly and may go as high as 41,500 before coming down.
We may have to wait a few more days even before the apex is reached. It would be a good idea to trade within the wedge now while the spread is still good. : )
The resulting change is that while BTC continues to be in a rising wedge, the original trend lines were too narrow and thus I prematurely called the apex.
Based on the current pattern, BTC is continue climbing up slowly and may go as high as 41,500 before coming down.
We may have to wait a few more days even before the apex is reached. It would be a good idea to trade within the wedge now while the spread is still good. : )
Comment:
Guess I was wrong about BTC having more time before the breakout! LOL
Resistance level of 41k was firmly rejected and exhausted bulls stopped the momentum for further upside. We have fallen through the 39K price with clarity and for the moment, the thing left to consider is where the bottom is.
There are 2 main things to consider here;
1. The lowest point at the start of the up trend appears to be about 33 to 34k.
2. Fibonacci retracement to the 618 level from the swing low of 39,400 to swing high of 41,000 appears to be 35k.
Depending on the momentum of the sell off heading towards the bottom it could land anywhere at those 2 points. Expect price to rally at 36 to 35k, but wait for the confirmation of reversal if possible as it may yet go even lower.
Resistance level of 41k was firmly rejected and exhausted bulls stopped the momentum for further upside. We have fallen through the 39K price with clarity and for the moment, the thing left to consider is where the bottom is.
There are 2 main things to consider here;
1. The lowest point at the start of the up trend appears to be about 33 to 34k.
2. Fibonacci retracement to the 618 level from the swing low of 39,400 to swing high of 41,000 appears to be 35k.
Depending on the momentum of the sell off heading towards the bottom it could land anywhere at those 2 points. Expect price to rally at 36 to 35k, but wait for the confirmation of reversal if possible as it may yet go even lower.
Keep a lookout for any candle closing strongly below the support line which stands at 39,800 right now. A surge in volume during the break will confirm the bearish reversal. I also expect many long contracts to be liquidated upon the breakout and we should expect very big price action in a short time frame.