BTCUSD - Long Term Studies for Bullish Scenarios.
With the hype of bitcoin halvening, there has been a lot of noise. Lets take a look at the actual price action of bitcoin and see what technical analysis has to say about it.
For the last half a year, bitcoin has been trading in what looks like a descending channel (if you draw the lines from the top of the wicks) or a Broadening Formation (if you draw the lines based on the body of the candles). For this analysis, we will be looking at the Broadening Formation.
What is a Broadening Formation?
According to investopedia (www.investopedia.com...adeningformation.asp), "a broadening formation is a price chart pattern identified by technical analysts. It is characterized by increasing price volatility and diagrammed as two diverging trend lines, one rising and one falling. It usually occurs after a significant rise, or fall, in the action of security prices. It is identified on a chart by a series of higher pivot highs and lower pivot lows".
This is an oscillation pattern that signifies the uncertainty in the market and could break up from the top of the channel or down from the bottom of the channel. We will be speculating the scenario for a break up from the channel in this analysis.
Since price has been rising without any significant pull backs, we think the there is a higher probability of a pull back from the upper resistance of the channel.
The key is where will Bitcoin price find support?
There is a major ascending support from the 200 Weekly EMA and 200 Weekly SMA. For a very Bullish scenario, the support could even be around 21 and 55 weekly EMA. The Fibonacci Retracement lines also aligns with these supports.
If price finds support in any of those ranges, the resulting pattern will look like an inverted head and shoulders or an ascending triangle, like the one we saw recently on the hourly, which are both very bullish patterns!
Happy Trading :)
For the last half a year, bitcoin has been trading in what looks like a descending channel (if you draw the lines from the top of the wicks) or a Broadening Formation (if you draw the lines based on the body of the candles). For this analysis, we will be looking at the Broadening Formation.
What is a Broadening Formation?
According to investopedia (www.investopedia.com...adeningformation.asp), "a broadening formation is a price chart pattern identified by technical analysts. It is characterized by increasing price volatility and diagrammed as two diverging trend lines, one rising and one falling. It usually occurs after a significant rise, or fall, in the action of security prices. It is identified on a chart by a series of higher pivot highs and lower pivot lows".
This is an oscillation pattern that signifies the uncertainty in the market and could break up from the top of the channel or down from the bottom of the channel. We will be speculating the scenario for a break up from the channel in this analysis.
Since price has been rising without any significant pull backs, we think the there is a higher probability of a pull back from the upper resistance of the channel.
The key is where will Bitcoin price find support?
There is a major ascending support from the 200 Weekly EMA and 200 Weekly SMA. For a very Bullish scenario, the support could even be around 21 and 55 weekly EMA. The Fibonacci Retracement lines also aligns with these supports.
If price finds support in any of those ranges, the resulting pattern will look like an inverted head and shoulders or an ascending triangle, like the one we saw recently on the hourly, which are both very bullish patterns!
Happy Trading :)
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