Hi friends, hope you are well and welcome to the Bitcoin.
A big Butterfly move completed:
Previously I posted an idea that on the monthly chart, the price action of Bitcoin is completing a bearish Butterfly pattern, and finally, the priceline has completed the final leg of this pattern and entered the potential reversal zone. Now the priceline is even moved above this PRZ level.
Even though priceline is spiking beyond the potential reversal zone of Butterfly but it can the same as the previous move of Bitcoin that I shared back in April 2020. When the price action of Bitcoin completed a Gartley pattern and spiked beyond the potential reversal zone. But the price action did not close below the PRZ level on the monthly time period and re-entered in the potential reversal zone and produced a more than 400% rally.
A breakout from the rising wedge pattern:
On a small time period 4-hour chart, the price action of BTC formed a rising wedge and after breakout it has again entered in this pattern.
A head & Shoulder move:
On the hourly chart, the price action completed Head and Shoulder pattern and broke down the neckline of this pattern.
Bearish divergence:
On the 4-hour chart, a 1st bearish divergence has been appeared as from the 2nd to 4th Jan the priceline was making higher highs but the relative strength index was forming lower lows. Finally, the priceline followed the trend of RSI. If such bearish divergences will be appeared on the daily chart as well, then we can expect a start of a correction rally soon.
Up-trend line support:
On the 4-hour chart, the price action of Bitcoin is in an uptrend, and today’s sell-off even could not break down this uptrend so far. If this uptrend line will be broken down then it can be a second signal for the starting of the correction rally.
1st Support:
If a correction rally will be started, then the priceline of Bitcoin can test the exponential moving average 21 on weekly chart, that is at $18700 at the moment.
EMAs on the daily chart:
If the bearish divergence will be appeared and the uptrend support line on the 4-hour chart will be broken down then finally we should wait for the exponential moving averages with the time period of 10 and 21 to form a bear cross with each other, it can be a final confirmation for the starting of the correction rally.
Conclusion:
Even though due to sell off, the price action of the leading cryptocurrency has dropped more than 17.5% in a single day, but this sell of cannot even breakdown the uptrend on the small time period chart. Therefore, so far it is not confirmed that the Bitcoin is going to start a rally to the down side.
A big Butterfly move completed:
Previously I posted an idea that on the monthly chart, the price action of Bitcoin is completing a bearish Butterfly pattern, and finally, the priceline has completed the final leg of this pattern and entered the potential reversal zone. Now the priceline is even moved above this PRZ level.
A breakout from the rising wedge pattern:
On a small time period 4-hour chart, the price action of BTC formed a rising wedge and after breakout it has again entered in this pattern.
A head & Shoulder move:
On the hourly chart, the price action completed Head and Shoulder pattern and broke down the neckline of this pattern.
Bearish divergence:
On the 4-hour chart, a 1st bearish divergence has been appeared as from the 2nd to 4th Jan the priceline was making higher highs but the relative strength index was forming lower lows. Finally, the priceline followed the trend of RSI. If such bearish divergences will be appeared on the daily chart as well, then we can expect a start of a correction rally soon.
Up-trend line support:
On the 4-hour chart, the price action of Bitcoin is in an uptrend, and today’s sell-off even could not break down this uptrend so far. If this uptrend line will be broken down then it can be a second signal for the starting of the correction rally.
1st Support:
If a correction rally will be started, then the priceline of Bitcoin can test the exponential moving average 21 on weekly chart, that is at $18700 at the moment.
EMAs on the daily chart:
If the bearish divergence will be appeared and the uptrend support line on the 4-hour chart will be broken down then finally we should wait for the exponential moving averages with the time period of 10 and 21 to form a bear cross with each other, it can be a final confirmation for the starting of the correction rally.
Conclusion:
Even though due to sell off, the price action of the leading cryptocurrency has dropped more than 17.5% in a single day, but this sell of cannot even breakdown the uptrend on the small time period chart. Therefore, so far it is not confirmed that the Bitcoin is going to start a rally to the down side.
