So as expected, Bitcoin dropped soon after confirming hidden divergence in the 4h and 6h charts.
All hope is not lost! There are a lot of hidden signals that have presented themselves from this dump.
The .618 located at $3,550 held. No 4 or 6 hour candle so far was able to close decisively below it.
There is hidden that is now presenting itself in the 4h and 6h chart. We have a much higher low in price, with a lower low in the . This suggests the bear momentum is beginning to falter.
Only a close below $3,120 can invalidate this hidden divergence.
We still have a huge form of support located around $3,360 - the .786 bull retracement from this huge bounce.
It just so happens that a 5th wave down from our local high will place us at exactly this .
Support holding at this level would be extremely , as it is arguably the last line of defense for the bulls.
On the 5d time frame, a cross is attempting to form on the . That candle closes later today, but as it stands the candle is which isn't normally a good sign. Only a close above $3,700 would nullify that.
There is also the chance that we are still forming a giant correction from the overextended selling pressure from November. Currently the target for that sits at around $4,550.
Holding the .618 here would be very , though I do not see that happening. The dump was I believe a wave 3, and right now we are experiencing a slight relief from a wave 4 retracement.
If I am correct, a 5th wave will place us exactly on the .786.
I believe at this point we will most definitely test the . . What the market does at that point will decide our entire medium-term future. This particular area would have a very high RR for a long, so I would strongly suggest to look for a long entry around this area. I am still extremely until a break of $4,100.
A 4h close below $3,120 will initiate a short with an initial target of $2,435.
This is a long setup if I ever saw one.
I was almost certain we weren't going to break back below that this soon.
If we get down that far, I expect $3,450 to be some serious support.
Keep that in mind.
Call me bias, call me what you want.
Something I'm wondering, what if we bullishly diverge the bullish divergence on the daily? That would mean price would get significantly lower, especially after this bounce...But the RSI would be higher.
Typically speaking, after a move such as the one from $6,300, we would normally AT MINIMUM re-test the bottom.
This has me thinking...What about the weekly? We just dipped our toes into oversold but have yet to test the strength of the bulls.
I think we're about to see a new low in the coming weeks.
If we were to bullishly diverge on the weekly RSI...This would make sense.
However, if we bullishly diverge in the weekly RSI...
I will be a buyer. A big one.
On the 2d time frame, which just closed a bearish engulfing candle, we are bullishly diverging.
This may not seem like a big deal, but currently in the 1w timeframe we are sitting on a higher low. The 5d MACD is showing a bullish cross on the next candle close if we hold this low.
This along with the massive divergence in the 12h leads me to believe there should be a very nice relief rally if we hold above $3,550.
This is so hard to call, but I'd have to say I'd definitely be long if this holds the .786.
1D is showing a bearish crossover forming in the MACD.
Currently, Bitcoin is struggling to get above the .236 retracement of this dump.
This could indicate what I said earlier, a wave 4 retracement from our local high, which would begin a final incoming wave 5.
If this is the case, I've marked where I believe Bitcoin will catch support next.
The box is extreme support. Should it break, I believe it to be highly likely that Bitcoin will re-test the current yearly low, and probably plunge right through it.