Bitcoin continues to appear very bullish but...
Good morning, traders. Yesterday proved to be very profitable for Bitcoin bulls, but what should we expect now? It seems that we still have some energy left in the bullish momentum as price hovers around $7400-$7500. Ultimately, we expect to see a retracement after that big move yesterday. The previous supply zone between $6750 and $6900 should contain extensive downward movement. If it fails to hold then we could likely be headed toward $6000. Prior to completing that retracement, however, we may see price make one more attempt higher.
Currently, we can see that price is printing a symmetrical triangle on the 1H chart. If price breaches resistance, then we expect it to target the $7700 area before finally beginning the retracement toward the expected target area of $7150-$7250. As mentioned above, if we see retracement beyond that area then, as long as that previous supply zone (lower large green box) holds, we should be fine. That retracement should complete wave 4 and set the wheels in motion for wave 5 which should see price targeting the top of the upper large green box, between $7720 and $7930, and then the 2.618 extension at $8553.50. Just like the previous supply zone, a breach of this level will likely see large moves up as the market FOMOs in. Additionally, breaching this level sets all shorts in the past month-and-a-half, or so, into negative territory which will result in liquidations and covering, and it will likely see price breaching the resistance of the large descending wedge price has been in since February thereby providing even more buyers via FOMO.
The daily chart continues to look absolutely amazing at this time and we can see price finding resistance at the R3 pivot which is also the bottom of the daily cloud. However, just because this appears very bullish doesn't mean traders can begin operating emotionally again. Emotion, whether depressive or euphoric, will always end up destroying your capital. Rule #1 is to always protect your capital and Rule #2 is, then, to grow your capital. We can see that the Kijun line is currently sitting on the $7200 level which should help support price on a retracement. Volume and spread has continued to rise overall which is another sign of bullish momentum as it shows us that volume is in agreement with price. Daily RSI is at 67.6 while most lower TF RSIs still remain in overbought territory.
Currently, we can see that price is printing a symmetrical triangle on the 1H chart. If price breaches resistance, then we expect it to target the $7700 area before finally beginning the retracement toward the expected target area of $7150-$7250. As mentioned above, if we see retracement beyond that area then, as long as that previous supply zone (lower large green box) holds, we should be fine. That retracement should complete wave 4 and set the wheels in motion for wave 5 which should see price targeting the top of the upper large green box, between $7720 and $7930, and then the 2.618 extension at $8553.50. Just like the previous supply zone, a breach of this level will likely see large moves up as the market FOMOs in. Additionally, breaching this level sets all shorts in the past month-and-a-half, or so, into negative territory which will result in liquidations and covering, and it will likely see price breaching the resistance of the large descending wedge price has been in since February thereby providing even more buyers via FOMO.
The daily chart continues to look absolutely amazing at this time and we can see price finding resistance at the R3 pivot which is also the bottom of the daily cloud. However, just because this appears very bullish doesn't mean traders can begin operating emotionally again. Emotion, whether depressive or euphoric, will always end up destroying your capital. Rule #1 is to always protect your capital and Rule #2 is, then, to grow your capital. We can see that the Kijun line is currently sitting on the $7200 level which should help support price on a retracement. Volume and spread has continued to rise overall which is another sign of bullish momentum as it shows us that volume is in agreement with price. Daily RSI is at 67.6 while most lower TF RSIs still remain in overbought territory.
Comment:
Remain cautious trading in this area right now, traders. As I discussed in the live stream this morning and subsequent TA video (TV won't allow me to tell you where they're located, but I'm sure you can figure it out), the longer we remain in this area the more likely we are to bounce from here rather than get the retracement we've been looking for. OBV continues to print higher lows and highs while price has printed lower lows and highs the past 6 months. If you believe that volume precedes price, and I've of the mind that traders should believe that, then we should believe that price is headed to a showdown with the ATH rather than repeating 2014. There are no guarantees in trading, however, so risk management remains key.
