Hey guys just wanted to give a quick update on Bitcoin’s current situation. Unfortunately the bat harmonic in my last update never gave us any reversal signals in the PRZ and failed to complete the pattern.
Now Bitcoin is at a decision point with strong support just below current price around the 6,700 range and strong resistance above around the 7.4k-7.5k price range.
It seems the price has found some support at the 50MA (light blue) over the last couple of days and if the bulls are able to keep up momentum and stay above the 50MA it should jump up towards the 89EMA (purple) and the 100MA (green).
This range should provide strong resistance based on the following factors:
- 89EMA (in purple)
- 100MA (in green)
- 61.8% retracement of 10k down to 5.7k
- Point of Control on volume profile tool
We see on the indicators that the oscillator has fallen well below the lower boundary of the Stochastic and just touching the 0 line of the CMF. Looking back in the middle of May we can see a very similar setup on both indicators as well as the fact that the price broke both 89EMA and 100MA to find support at the 50MA before making another move up to re-test the upper moving averages. If Bitcoin follows the same May pattern we should see the 7,400-7,500 region get retested over the next couple of days before falling again.
However, if the 50MA breaks and price keeps falling, then price should find support at the 6,700 range where both the 0.786 fib level and the volume profile tool show strong support.
A drop from here is the most likely scenario however that changes if the 50MA continues to hold the price up.
For now we wait and see where the price goes before making our next move.
Please like if you find this useful!
Now Bitcoin is at a decision point with strong support just below current price around the 6,700 range and strong resistance above around the 7.4k-7.5k price range.
It seems the price has found some support at the 50MA (light blue) over the last couple of days and if the bulls are able to keep up momentum and stay above the 50MA it should jump up towards the 89EMA (purple) and the 100MA (green).
This range should provide strong resistance based on the following factors:
- 89EMA (in purple)
- 100MA (in green)
- 61.8% retracement of 10k down to 5.7k
- Point of Control on volume profile tool
We see on the indicators that the oscillator has fallen well below the lower boundary of the Stochastic and just touching the 0 line of the CMF. Looking back in the middle of May we can see a very similar setup on both indicators as well as the fact that the price broke both 89EMA and 100MA to find support at the 50MA before making another move up to re-test the upper moving averages. If Bitcoin follows the same May pattern we should see the 7,400-7,500 region get retested over the next couple of days before falling again.
However, if the 50MA breaks and price keeps falling, then price should find support at the 6,700 range where both the 0.786 fib level and the volume profile tool show strong support.
A drop from here is the most likely scenario however that changes if the 50MA continues to hold the price up.
For now we wait and see where the price goes before making our next move.
Please like if you find this useful!
Comment:
Price is currently at the 50% retracement level of 8,500 down to 5,700. It is also dealing with the 100MA and the 89EMA on the hourly. Once this level breaks it should quickly move towards 7.4k-7.5k.
Comment:
The 0.5 fib level and moving averages proved to be too difficult a resistance for price to get past. That drop took out the 50MA on the daily in the process and accelerated downward. The next line of support is around $6400 where the 0.786 fib lies and POC. I will be looking there for any sign of a rebound.
Comment:
Quick update: Bitcoin fell below the 0.768 rapidly but the bulls have been trying hard to get price back above this level. Unfortunately for the bulls, it’s now simply being tested as resistance and they are having trouble breaking this fib level. We’ll see what happens in the coming hours or days but downside seems more likely right now. If that happens, the next support is the 5.7k low that marked the reaction low prior to the entire July bull run. That support is relatively weak so I wouldn’t be surprised if that breaks too. I’ll try to keep you updated as things change.
Comment:
I want to follow up on my last comment. There is a relatively strong support defined by the 89EMA (shown in purple) on the weekly. This support held Bitcoin in June so let’s see if it’s able to hold again. So far the price hasn’t been able to break below this moving average.
Comment:
Update: Turns out that drop yesterday was nothing but a bear trap. The price bounced right back up above the 0.786 which is giving some positive signs for the bulls.
I meant to update last night when I noticed some massive bullish divergences on the RSI and CMF before today’s jump.
Take a look at this snapshot:
Another bullish sign was a nice wick down and bounce off the 89EMA on the weekly (in pink). This is something I have mentioned several times through my updates to keep a close eye on.
I also noticed shorts were starting to drop on Bitfinex, see how much they fell from last night through today:
I decided to open up a small long position last night and I’m glad I did with today’s jump, however we are not totally out of the woods. I think it’s possible we still get up towards the 0.618 around 6,800 but another big drop after that is definitely still in play.
Looking at the shorts, we could see them climb back up again and maybe form a bearish divergence similar to the one we saw occur back in June which could lead to a real rally in the upcoming days/weeks. Or shorts will make a stronger rally and the price will continue to dump into the bottom of the falling wedge shown here:
Another possible sign of an impending dump is a death cross from the 200MA (orange) and the 4000MA (light blue) on the daily view (seen in last chart image above) If this happens, we will most likely see many bearish weeks ahead of us.
In conclusion, we have some short to medium term bullish signals that could bring us some upside over the upcoming days. But from a longer term perspective there are many bearish signals that are apparent on higher time frames than the bullish signals which are only currently seen on lower time frames.
Hope this helps you guys!
I meant to update last night when I noticed some massive bullish divergences on the RSI and CMF before today’s jump.
Take a look at this snapshot:
Another bullish sign was a nice wick down and bounce off the 89EMA on the weekly (in pink). This is something I have mentioned several times through my updates to keep a close eye on.
I also noticed shorts were starting to drop on Bitfinex, see how much they fell from last night through today:
I decided to open up a small long position last night and I’m glad I did with today’s jump, however we are not totally out of the woods. I think it’s possible we still get up towards the 0.618 around 6,800 but another big drop after that is definitely still in play.
Looking at the shorts, we could see them climb back up again and maybe form a bearish divergence similar to the one we saw occur back in June which could lead to a real rally in the upcoming days/weeks. Or shorts will make a stronger rally and the price will continue to dump into the bottom of the falling wedge shown here:
In conclusion, we have some short to medium term bullish signals that could bring us some upside over the upcoming days. But from a longer term perspective there are many bearish signals that are apparent on higher time frames than the bullish signals which are only currently seen on lower time frames.
Hope this helps you guys!
We should see price get up towards the 7,400-7,500 range.