Good morning, traders. Bitcoin continues to edge higher, but will it be enough to push it through the threshold of resistance? Price hit a high of $4055 this morning before retreating to $3919. The lack of strong follow through to the upside of $4100 and beyond, so far this year, has more and more traders thinking that price must go down rather than up. Could this just be disbelief as price grinds higher through supply? It makes no sense to enter long or short at this time (unless you're entering long for investment purposes which means a year+ TF or your intention is a small scalp with tight risk management). But here's what's likely going to happen -- traders are going to enter at this point anyway because they're bored or they're gambling that price will go their way and they will lack the requisite risk management. "After all," they tell themselves, "I have a 50/50 chance of being right and if I'm right I'll be rich!" As such, they tend to overestimate their ability to exit with profit and as a result overstay their welcome in a chop trade.
The fact that price has not dumped to below $3600 yet, but instead continues to grind higher, gives the bullish some support in their thesis that price will head up to $5000 before potentially heading down below that $3600 level. In the near term, this appears to be supported by Stoch RSI bottoming out on the H12 and lower TFs at this time. Overall, we do see that H4 RSI and MACD have been weaker on the high since the previous swing high on March 15th, creating a bearish divergence, which has possibly already played out this morning, and this has led to a possible bullish divergence printing. As such, this could just be a temporary lull before a strong push through resistance -- a liquidation generation event as price took out some stops above the blue TR before taking out stops below it. Expanding the size of the local TR (blue) on the H4 TF shows that we could potentially see price trade sideways between $3900 and $4050 through the end of the month. We can also see the rising wedge in red, that I discussed previously, which suggests a breakdown could have price targeting the $3775/$3800 level if $3900 doesn't provide support. Current visible order books do not support that target on a breakdown at this time, so take that for what it's worth.
The wedge is very poorly printed. What I mean is that wedges which have price reacting as expected on a breakdown usually have much cleaner candles which define the wedge better. They lack the significant number of wicks that is prevalent in this particular pattern. As a result, I wouldn't be surprised to see price move sideways, rather than down, if the wedge breaks down. And if that happens, then it is an indication that this local TR is likely re-accumulation, rather than distribution, which would ultimately see price heading higher.
Currently, there's no way to know for sure which way price is ultimately heading. The inexperienced will argue that it's definitely going down. Again, this is a possibility, but until we see some sort of confirmation, that's all it is -- a possibility. The D1 TF shows a larger purple TR which would have this current local H4 blue TR possibly acting as the BUEC/LPS. It also shows the ascending red channel that is containing price, as well as a possible larger descending channel/flag. Most interesting at this time is that the H4 volume on that recent drop was almost 3/4 of the volume on the H4 drop of February 24th, but with significantly less volume. This shows us more effort but less result which appears to be indicating that demand is much stronger this time around than it was at that point, so traders should be careful if attempting to ride a large TF short from a recent entry.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
The fact that price has not dumped to below $3600 yet, but instead continues to grind higher, gives the bullish some support in their thesis that price will head up to $5000 before potentially heading down below that $3600 level. In the near term, this appears to be supported by Stoch RSI bottoming out on the H12 and lower TFs at this time. Overall, we do see that H4 RSI and MACD have been weaker on the high since the previous swing high on March 15th, creating a bearish divergence, which has possibly already played out this morning, and this has led to a possible bullish divergence printing. As such, this could just be a temporary lull before a strong push through resistance -- a liquidation generation event as price took out some stops above the blue TR before taking out stops below it. Expanding the size of the local TR (blue) on the H4 TF shows that we could potentially see price trade sideways between $3900 and $4050 through the end of the month. We can also see the rising wedge in red, that I discussed previously, which suggests a breakdown could have price targeting the $3775/$3800 level if $3900 doesn't provide support. Current visible order books do not support that target on a breakdown at this time, so take that for what it's worth.
The wedge is very poorly printed. What I mean is that wedges which have price reacting as expected on a breakdown usually have much cleaner candles which define the wedge better. They lack the significant number of wicks that is prevalent in this particular pattern. As a result, I wouldn't be surprised to see price move sideways, rather than down, if the wedge breaks down. And if that happens, then it is an indication that this local TR is likely re-accumulation, rather than distribution, which would ultimately see price heading higher.
Currently, there's no way to know for sure which way price is ultimately heading. The inexperienced will argue that it's definitely going down. Again, this is a possibility, but until we see some sort of confirmation, that's all it is -- a possibility. The D1 TF shows a larger purple TR which would have this current local H4 blue TR possibly acting as the BUEC/LPS. It also shows the ascending red channel that is containing price, as well as a possible larger descending channel/flag. Most interesting at this time is that the H4 volume on that recent drop was almost 3/4 of the volume on the H4 drop of February 24th, but with significantly less volume. This shows us more effort but less result which appears to be indicating that demand is much stronger this time around than it was at that point, so traders should be careful if attempting to ride a large TF short from a recent entry.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
Comment:
This is the possible hidden bullish divergence I was referring to above:
Comment:
There is also the possibility that we could see a repeat of the pattern seen between February 24 and yesterday, but obviously on a much more truncated schedule, and if that's the case then the consolidation toward $4030 that results could be the catalyst needed to propel price through the lingering resistance:
Comment:
Finally, we could see a broadening wedge playing out the on the daily:
It's way too early to know if either of these two possibilities are going to play out, but they bear watching for now.
It's way too early to know if either of these two possibilities are going to play out, but they bear watching for now.