BTC sell/short. Divergence. Target 7850 and lower!

Bitcoin has now put in an RSI and MACDH divergence on the 1HR timeframe with a high volume sell candle. If we zoom out further we can see that we are in a rising wedge channel which is a reversal indicator and we have now just put in a lower high on the 4 hr charts. Both bearish signs. We may also be seeing a double top here. Furthermore this looks like a breakout fakeout of the descending trend line over many months. All in all a lot of bearish confluence with lower highs after lower highs. We have some support in the green box but if that fails we can expect a retest of the next box below at 7850. The 7850 region could be a good place to reverse and go long if the breakout of the rising wedge itself fails. However the lower highs after lower highs on the daily charts should be a concern for medium term holders.

One other thing is we should note that BTC has been running in line with equities of late and they have recently sold off from highs, this may be BTC's turn now.

Tight stop in the 9450 area. One good thing about these divergence trades is that if the stop is hit that would indicate incredible strength in the market and with support just below, it could be a potential springboard to go a lot higher so a reversal long may be a good play providing support holds.

Trade closed: stop reached

Trade closed: target reached:

As predicted once the stop was broken we saw a great move upwards where I was able to cover previous losses and make some decent profit before closing out again at 10,000. Hope you did the same!