Good morning, traders. Yesterday's price action has everybody instantly bearish... again. It also shows why I am always discussing the importance of risk management and intelligent stop losses. No matter how good you may feel the charts look at the time, absolutely anything can happen. In this case, we've been discussing the possibilities of having topped out or having one more small leg up into $6000. Yesterday I, again, discussed the bearish divergence that was printing on the daily. I have warned traders countless times to wait for confirmation before entering a position and not to allow their boredom or FOMO to direct their trading. I could afford to continue looking at higher targets because I was already long and continue to remain long at this time.
CME Bitcoin April Futures expire in a couple of hours, and we usually expect to see some volatility leading up to that, so be careful if trading at this time. As far as price goes, as long as we continue to close above ~$4700, price has done nothing more than confirmed the TR that began on April 3rd. Even if it were to drop below a bit, it could be nothing more than a Spring, so traders should be paying attention to volume and price action. If price closes above $5200 (we are talking about the Bitstamp chart), then things start to get interesting. A close above $5320 sets up a possible move higher. So far, we have seen a rebound of between 50% and 61.8% as I told our Discord members I expected last night, and price appears to be flagging while finding support on the recent resistance. This suggests more upside in the near term. I also mentioned to our Discord members that there is a gap around $5400 which I would expect to see price fill in.
Here's the kicker that nobody is talking about: the 4H candle that encompassed yesterday's drop of just over $500 was almost exactly the same size as the 4H candle drop on April 3rd, yet the volume was slightly less than half, and it was also less than the volume of the $250 drop on April 11th. Everything else aside, this comparison generally tells us that there wasn't the conviction to sell this time around that there has been. If there isn't market conviction to sell, then price generally heads back up. This doesn't guarantee that we will see price return to the recent high, but we shouldn't be surprised if it does.
Daily RSI fell through support, which is a potentially bearish sign. However, the 4H RSI bounced off oversold and the 1H RSI dipped well into oversold, just recently pushing above it. The 1H MACD printed a bullish cross earlier this morning and, currently, we have hidden bullish divergence printing on the 1D RSI and on the 4H MACD. The 4H Stoch RSI is in oversold and the 1H Stoch RSI has just recently moved into overbought. BTCUSD Shorts are very overbought and Longs are just the opposite. It's the potential spark that could send price into a short squeeze, especially with expected CME volatility.
I added the red descending channel on the 1H chart. In the near term, a close above the channel's EQ should have traders looking for price to target the channel's resistance. A break above the channel's resistance would give us a target of ~$6000, but of course the HVN is a few hundred dollars higher. Another way to look at the red channel is as a possible descending broadening wedge, which I've drawn in purple on the 4H chart. The target of ~$6000 remains the same. It would be bullish to see price moving above the HVNs on the various TFs. RSI breaking through its resistance on the 1H and 4H TFs would confirm some upward momentum.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
CME Bitcoin April Futures expire in a couple of hours, and we usually expect to see some volatility leading up to that, so be careful if trading at this time. As far as price goes, as long as we continue to close above ~$4700, price has done nothing more than confirmed the TR that began on April 3rd. Even if it were to drop below a bit, it could be nothing more than a Spring, so traders should be paying attention to volume and price action. If price closes above $5200 (we are talking about the Bitstamp chart), then things start to get interesting. A close above $5320 sets up a possible move higher. So far, we have seen a rebound of between 50% and 61.8% as I told our Discord members I expected last night, and price appears to be flagging while finding support on the recent resistance. This suggests more upside in the near term. I also mentioned to our Discord members that there is a gap around $5400 which I would expect to see price fill in.
Here's the kicker that nobody is talking about: the 4H candle that encompassed yesterday's drop of just over $500 was almost exactly the same size as the 4H candle drop on April 3rd, yet the volume was slightly less than half, and it was also less than the volume of the $250 drop on April 11th. Everything else aside, this comparison generally tells us that there wasn't the conviction to sell this time around that there has been. If there isn't market conviction to sell, then price generally heads back up. This doesn't guarantee that we will see price return to the recent high, but we shouldn't be surprised if it does.
Daily RSI fell through support, which is a potentially bearish sign. However, the 4H RSI bounced off oversold and the 1H RSI dipped well into oversold, just recently pushing above it. The 1H MACD printed a bullish cross earlier this morning and, currently, we have hidden bullish divergence printing on the 1D RSI and on the 4H MACD. The 4H Stoch RSI is in oversold and the 1H Stoch RSI has just recently moved into overbought. BTCUSD Shorts are very overbought and Longs are just the opposite. It's the potential spark that could send price into a short squeeze, especially with expected CME volatility.
I added the red descending channel on the 1H chart. In the near term, a close above the channel's EQ should have traders looking for price to target the channel's resistance. A break above the channel's resistance would give us a target of ~$6000, but of course the HVN is a few hundred dollars higher. Another way to look at the red channel is as a possible descending broadening wedge, which I've drawn in purple on the 4H chart. The target of ~$6000 remains the same. It would be bullish to see price moving above the HVNs on the various TFs. RSI breaking through its resistance on the 1H and 4H TFs would confirm some upward momentum.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
