Target set at $3950 using the height, our 1D SMA30, strong horizontal resistance and a 38.2 fib retracement back to our 18 Nov swing high. The height works out to a 40.94% upside target at around $3950. Once we reach this resistance, we should drop with a 138.2 fib extension to around $1700.
Hopefully the drop to $1700 will be our capitulation but we need to keep an eye on at that stage to be certain. We need a stronger red candle than we have had all year.
We still have on the daily and weekly charts so this bounce is imminent, I just think we have one more wave down to support before we break out towards $4k.
Good luck and happy trading!
Volume tells it all. We simply have not been able to sustain the same buying pressure that took us back to $3500. Bitcoin looking overbought on the hourly so we should have a 38.2/50 fib retracement back to $3411 /$3356 before another attempt at the wedge resistance.
Something to keep in mind, it looks like we might potentially be forming the right shoulder of an inverse head and shoulders so keep an eye on the wedge resistance after our retracement. If we break above the wedge resistance with volume, we'll probably have a breakout from the inverse H&S neckline (somewhere around $3570).
Considering the time of year, I would be very careful relying on this inverse H&S to play out. I think there's a good chance that the downtrend continues to $3k after a 3rd attempt. Rather keep an eye on volume and our wedge resistance and if we have a sustainable break above $3600 with strong volume then it would be worth taking a long position on breakout with a stop loss just below our wedge resistance. Until then I don't believe the bulls have the upper hand just yet.