Good Wednesday morning, traders. Bitcoin followed the red-outlined likely movement, hit our targets that we discussed on last night's live stream, and is looking to exit the DBW that it has been in for the past 2-3 days. Before it does, we should see some consolidation right below support. A breach should provide a target of $6780, based on the widest area of the pattern. That also takes price to the top of the yellow zone. This is all no surprise, however, because as we discussed last night there was a 4H bullish divergence building at that time. Currently, the 4H MACD is attempting to print a bullish cross. Both, RSI and MACD, are about to become bullish on this TF as well. Additionally, a breach of $6600 should take price out of the 1D flag it has been printing which would then provide a target, based on the flagpole, of $7350 at this time. Many people are calling this whole upward movement from September 5th a bear flag, but it is most likely the completion of a compound fulcrum.
If you've been following Peter Brandt on the other social media platform, then you know he mentioned a pattern called a compound fulcrum this morning. It is a reversal pattern and is pretty rare. Basically, it is what appears to be a head and shoulders pattern at the bottom of an extended downward movement. It indicates that a bottom is likely forming. A breach of the September 4th swing high at around $7405 would confirm this pattern. This, of course, would also pull price out of the large descending triangle/wedge that price has been printing since February as well as the symmetrical triangle that it has been printing since June. In other words, all these patterns are lining up as likely bullish reversals at the same general exit point. Furthermore, this is all happening as Bakkt is nearing launch, and as I've mentioned numerous times before Bakkt is huge for the market but retail traders are too caught up in the sub-$5000, 2 year long bear winter narrative to understand how significant it really is. BTC/USD longs continue to grow and shorts have dropped a bit overnight, however the ratio remains greater than 1:1 in favor of shorts.
DXY is attempting to breach the descending channel's resistance, most likely a result of expected interest rate hike today. Again, this isn't anything surprising and has been what we've been suggesting would likely happen today. However, if the FOMC doesn't raise interest rates, we can expect a strong drop in the DXY. Gold is dropping just a bit, but remains well within the TR it established over a month ago. DJI continues to drop as expected as well while the S&P is printing bearish divergence on the 1M chart with RSI in overbought territory. We saw the S&P do the same thing the DJI did last Friday which is print a small-range candle at a new ATH with volume that doubled the recent average. Again, this signifies C.O. selling into retail euphoria - distribution.
If you've been following Peter Brandt on the other social media platform, then you know he mentioned a pattern called a compound fulcrum this morning. It is a reversal pattern and is pretty rare. Basically, it is what appears to be a head and shoulders pattern at the bottom of an extended downward movement. It indicates that a bottom is likely forming. A breach of the September 4th swing high at around $7405 would confirm this pattern. This, of course, would also pull price out of the large descending triangle/wedge that price has been printing since February as well as the symmetrical triangle that it has been printing since June. In other words, all these patterns are lining up as likely bullish reversals at the same general exit point. Furthermore, this is all happening as Bakkt is nearing launch, and as I've mentioned numerous times before Bakkt is huge for the market but retail traders are too caught up in the sub-$5000, 2 year long bear winter narrative to understand how significant it really is. BTC/USD longs continue to grow and shorts have dropped a bit overnight, however the ratio remains greater than 1:1 in favor of shorts.
DXY is attempting to breach the descending channel's resistance, most likely a result of expected interest rate hike today. Again, this isn't anything surprising and has been what we've been suggesting would likely happen today. However, if the FOMC doesn't raise interest rates, we can expect a strong drop in the DXY. Gold is dropping just a bit, but remains well within the TR it established over a month ago. DJI continues to drop as expected as well while the S&P is printing bearish divergence on the 1M chart with RSI in overbought territory. We saw the S&P do the same thing the DJI did last Friday which is print a small-range candle at a new ATH with volume that doubled the recent average. Again, this signifies C.O. selling into retail euphoria - distribution.