After the enormous rise that BTCUSD has seen this year, the price is taking a pause and has started to consolidate. That is partly to harmonize the still vastly overbought 1D technical aspects (RSI = 87.317, MACD = 1105.700, ADX = 82.682) and to some extent short term traders booking profits. As an analytics firm, we suggest that a double time-frame analysis is best suited to analyze the current market dynamics.
The key aspect on the 4H chart (left) is the Bearish Divergence. The price is rising inside a Channel Up while the RSI is falling inside a Channel Down. Technically if the price breaches below the Channel Up, it will look for the 4H MA50 for Support validation, which by that time should very near the structure. If broken, that will be the wave that will correct the enormous rise to some extend and a sell opportunity. The 4H MA200 is the most likely target.
On the 1D chart (right) the key is Resistance Band 1 and whether or not a candle closes above it. If it does, we expect a rally extension to Resistance Band 2. If Resistance Band 1 rejects the candle, then we go back to the 4H correction mentioned above to the 4H MA200. An element that adds value here is the Support Band. On a 6 month variance it has offered the strongest levels of Support. This means that it is likely to see most candles closing inside it (or above it), which in turn suggests that the 4H MA200/ 1D MA50 may be approached by candle wicks momentarily on high volume candle extensions. Still, that addition can expand your analytical perspective if you are looking for an entry.
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The key aspect on the 4H chart (left) is the Bearish Divergence. The price is rising inside a Channel Up while the RSI is falling inside a Channel Down. Technically if the price breaches below the Channel Up, it will look for the 4H MA50 for Support validation, which by that time should very near the structure. If broken, that will be the wave that will correct the enormous rise to some extend and a sell opportunity. The 4H MA200 is the most likely target.
On the 1D chart (right) the key is Resistance Band 1 and whether or not a candle closes above it. If it does, we expect a rally extension to Resistance Band 2. If Resistance Band 1 rejects the candle, then we go back to the 4H correction mentioned above to the 4H MA200. An element that adds value here is the Support Band. On a 6 month variance it has offered the strongest levels of Support. This means that it is likely to see most candles closing inside it (or above it), which in turn suggests that the 4H MA200/ 1D MA50 may be approached by candle wicks momentarily on high volume candle extensions. Still, that addition can expand your analytical perspective if you are looking for an entry.
## If you like our free content follow our profile to get more daily ideas. ##
## Comments and likes are greatly appreciated. ##
## Also DONATIONS through TradingView coins help our cause of increasing the daily ideas put here for free and reach out more traders like you. ##
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Over 65% accuracy on Private Signals Channel.
Over 15% return monthly on our Account Management Plan.
Account RECOVERY services.
Free Channel: t.me/investingscopeofficial