It is Sunday, so it is time to review BTC's weekly candle.
During this week Bitcoin experienced a roller coaster ride. In the first days of the week, it reached nearly 7500$ mark. It is an increase of nearly 70% from its previous weeks low. It hit a 50 day moving average, by that signalling to us a first great level of resistance. This allowed us to form a solid green 1 above a red 2 (using TD Sequential indicator). However, at the end of the week, the bears took back control. Pushing the price down to a 6800$ level.
This week's candle reminds me of a 'Shooting Star formation'. It is a reversal pattern which usually appears at the top of a rally. is formed when open and close are on the similar level, with a long upper shadow. This identification suggests us that the bears could reject the bulls. Long upper shadow is a representation of the fact that the market found the resistance and bears began to push the price lower, ending the week near the opening price. Following an uptrend, this formation signals us a shift in trend. However, a smart investor should use other indicators to determine further movements. I am going to wait a day and see if prices are continuing to fall and wait to start shorting.
At the moment we have to be careful. Recently, I have noticed how BTC correlates with America's indexes. Positive picture there brings optimism to BTC market as well. Tonight, new for S&P500 will open, and it will be our first indicator of where the markets could head in the near future.
During this week, we will witness a start of earning's season. Companies like, J.P.Morgan, Wells Fargo, J&J, Bank of America, Goldman Sachs and Citi are in the spotlight. Banking sector rallied this week on a news that the Fed are printing money to cover different types of financing, even junk bonds. This may create a confusing picture as to how long this life support will keep the economy upwards. Covering junk bonds may signal about weak fundamentals, however it has short term signals. The Wall Street will see it as opportunity to make more money before the bubble will burst. When this bubble of financing will burst, due to a very high and loss of value of dollar, people will tend to sell of their stock and search for alternatives. It could even be a case for bitcoin to start rallying to the moon, as a new safe heaven asset. However, initially the burst will have a knock on effect on BTC , as many people who had bought bitcoin in the last few weeks may notice that the "BTC express" is running out of steam and liquidate their longs.
Thank you for reading,
I hope you have a good day and wish everyone to get big profits this week !
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