BTCUSD - The Retracement has Begun

This weekly chart is showing that since September 11/23 Bitcoin has been on a real Tear advancing approximately 65% in 3.5 Months and during that time it traded well above the 7 day EMA. Last Friday however it broke the plane and today's candle shows a clear break back below the 7 day EMA. There is not a lot of support though along the way to prop it up and as the US Economy continues to strengthen BTC is likely to continue to drop back to at least the $30k level as per the Fibonacci Retracement.

Comment:

A lesson in Divergence. I like to keep things as simple as possible. For those of you reading this that were thinking this was going higher yet you want to pay particular attention. It may eventually but just not yet. The first clue is that as the higher highs were being reached, both the Money Flow Index and the True Strength Index were failing to follow suit a formed a Negative Divergence totally opposite of the Price Point and I always say the the PP will follow the MFI especially in the case of such a divergence. Having said that, even the last candle had a hard time making the MFI turn more verticle and if the price tries to go a little higher I suspect that as the MFI Oscillator gets tuned back yet again this week as it may rise to hit the MFI Divergent Line, you will see the price continue to drop further. My Target is the .618 Fibonacci Retracement level around $35313.11 that happens to coincide quite well with the 200 day EMA.

Notice as well how on January 18th there formed a Bearish Moving Average Cross for the first time since we had a Bullish cross form on October 19. I supect this may carry further forward as the price continues to drop at least over the next 2-3 weeks.