Bitcoin Reverse Head and Shoulder on Daily Still in Play

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
On the hourly analog Bitcoin Bitfinex chart, you can see how shortly after I posted yesterday, price had some significant upticks in volume and volatility complete with another fake-out move.

The blue up-trending line we discussed was tapped and launched higher as the bulls made a concerted effort to break that no go area above $6,763. Volume spiked and the bears defended that level successfully as the price could not create a higher wick from the green candle on Saturday evening at $6,839.

A lower high was made at $6,820 at 6pm EST yesterday and price was quickly crushed within a matter of minutes all the way back below the blue up trending support and then in the next pushed below the orange 55 hour EMA , the purple 100 MA, and the black 200 MA over several hours, blowing through the targets I was looking at yesterday.

The fun did not stop for the bears as once the critical supports were breached they could have their way all the way down to the turquoise horizontal support line at $6,358. There’s been a slight recovery over the past few hours, but the volume has died off for now.

Placing a Fibonacci retracement from the high on this move to the low back on June 24th yields about a .45 retracement and just short of the key green .5 line. I have also placed some potential points on snapshot below for a potential complete Elliot wave Cycle.

The important thing to note here is that price found support around the top of the wave 1, which may be why price fell short of hitting the .5 retracement. It is completely possible that price could head lower as it seems that the blue .786 Fib line sitting at $5,988 has been the flavor of the past few weeks on all crypto charts.

The RSI though is very oversold still sitting at 28.33 and just below 30 from entering the neutral zone. The MACD blue trigger line does appear like it wants to crossover bullishly and the histogram is ticking upward, but I think overall price needs to stabilize around this level for a bit longer to get a better idea on the next move.

On the daily analog Bitcoin Bitfinex chart, I removed the up-trending pitchfork because price invalidated it, but I really like the inverse head and shoulder pattern that I identified last week. And with today's candle we very well could have the top of that right shoulder.

Price does not have to get down to the left shoulder level at $6,100 before reversing upward, however I would definitely like to see more volume like we did on the left shoulder and head level.

I have adjusted this corrective Elliot Wave with ABC to extend it longer to where maybe price dips back to the .618 green level at $6,171 ending the wave C and I could then update the inverse head and shoulders accordingly.

I would like to see the RSI indicator come back down to the 35 to 37 level and tap that pink up-trending line before another impulse wave upwards.

The MACD histogram is bearishly ticking downwards again too, which then we could expect the blue trigger line to take a dip over the next few days as well. So maybe we will get an inverse head and shoulders pattern there too.

I would have thought there would be more of a reaction to the AO indicator ticking up through the zero bound line yesterday, and price did break upward first before heading decisively downward. But overall that bear move was overdue, which is why the move was quite fierce relatively for the last few days.

A bull target around that .382 $6,427 Fib level makes sense over the next 24 hours and if price does continue down tomorrow, that .618 Fib level at $6,171 for the bears.

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