Bitcoin IHS or are we headed definitively lower? (1D & 6H)
Good morning, traders. Bitcoin has finally been making some movement that we can look at, and it's nothing that we haven't been talking about as a possibility for a while now. Specifically, overnight we saw Bitcoin retrace 50% from its recent run up. Now things are becoming more interesting. The potential IHS in development that I have been referring to recently is becoming more likely.
The 1D chart shows the bigger picture. We can see the potential IHS playing out. However, as I have continued to mention anytime we discuss a potential IHS, we absolutely must see an expansion of volume as price completes the right shoulder and breaches the neckline. This is a requirement for this pattern. We have expansion into the shoulder's potential apex so far. Is this current price point the bottom of this movement? It appears that it may be when looking at lower time frames. We see that price made its low right into the top of the blue box before bouncing back up. I continue to watch for the blue box to hold as support. Furthermore, I am watching the daily candle. The daily pivot remains important, so we want to see price moving back up toward it. As we have discussed previously, a successful IHS should see price targeting the $7900 area.
The 6H chart shows us that the candles wicked into the blue box but the body on the previous candle closed above it and the current candle is sitting above it as well. While there are still 4 hours left in this candle, it is possible we may see tweezer bottoms being supported by the Kijun line near the bottom of the cloud thereby suggesting a reversal back up. Looking at it another way, the S1 is supporting price at this time. As always, a reversal off of support is significant. RSI appears to be adhering to its ascending support line, but that doesn't guarantee that it will not breach it. Remember, there is the potential for an IHS, but price and volume must follow through in order to see it materialize. Price falling below $6100 increases the odds significantly that we will retest the recent lows and likely head lower toward $5250.
Be sure to check out the 1H and 3D charts linked below.
The 1D chart shows the bigger picture. We can see the potential IHS playing out. However, as I have continued to mention anytime we discuss a potential IHS, we absolutely must see an expansion of volume as price completes the right shoulder and breaches the neckline. This is a requirement for this pattern. We have expansion into the shoulder's potential apex so far. Is this current price point the bottom of this movement? It appears that it may be when looking at lower time frames. We see that price made its low right into the top of the blue box before bouncing back up. I continue to watch for the blue box to hold as support. Furthermore, I am watching the daily candle. The daily pivot remains important, so we want to see price moving back up toward it. As we have discussed previously, a successful IHS should see price targeting the $7900 area.
The 6H chart shows us that the candles wicked into the blue box but the body on the previous candle closed above it and the current candle is sitting above it as well. While there are still 4 hours left in this candle, it is possible we may see tweezer bottoms being supported by the Kijun line near the bottom of the cloud thereby suggesting a reversal back up. Looking at it another way, the S1 is supporting price at this time. As always, a reversal off of support is significant. RSI appears to be adhering to its ascending support line, but that doesn't guarantee that it will not breach it. Remember, there is the potential for an IHS, but price and volume must follow through in order to see it materialize. Price falling below $6100 increases the odds significantly that we will retest the recent lows and likely head lower toward $5250.
Be sure to check out the 1H and 3D charts linked below.
