Bitcoin's looking good, but the dangers are far from over.
Bitcoin has overcome most of its overhead resistances, especially in terms of the red ichimoku kumos and EMA ribbons on the 1-, 2- and 4-hour charts. It is currently battling the very last edge of those indicator resistances (see picture).
Since Bitcoin broke down from its long rising wedge from February to May it has established a long series of lower highs and lower lows. Despite the fact that Bitcoin has now managed to establish a higher low, it still needs to break above the key level of resistance at around 42,000-42,500 before we can begin to be bullish for real. The technical reasons for this are simple.
1) This zone amounts to the January all-time high. It is a pivot top and hence automatically amount to strong support and resistance. Despite Bitcoin's strong bearish momentum over the last few weeks, it still respected this level before plunging down to $30,000.
2) This level is exactly where the previous local high is. Bitcoin needs to take out this area in order to establish a higher high.
3) The EMA200 is right at this level. Until we can break above and stay above it, that EMA200 will act as resistance on its own.
This is an absolute pivotal level. Bitcoin may very well be on its way towards new all-time highs already, and that reversal may have been firmly established - but until it breaks above the $42-42,5k zone, Bitcoin is HIGH RISK. This could all prove to have been one nasty dead cat bounce to punish any off-the-bat optimists who automatically become bullish when things go up and equally bearish whenever Bitcoin moves down.
As we're here to play the odds, any longs below this area come with high risk and low statistical return. It's like rolling a die and get 1:1 whenever you're correct. You may still win, but it won't take you long to land in the poor house.
For more detailed analysis, please follow us on Youtube (Long Life Trading)
Bitcoin has overcome most of its overhead resistances, especially in terms of the red ichimoku kumos and EMA ribbons on the 1-, 2- and 4-hour charts. It is currently battling the very last edge of those indicator resistances (see picture).
Since Bitcoin broke down from its long rising wedge from February to May it has established a long series of lower highs and lower lows. Despite the fact that Bitcoin has now managed to establish a higher low, it still needs to break above the key level of resistance at around 42,000-42,500 before we can begin to be bullish for real. The technical reasons for this are simple.
1) This zone amounts to the January all-time high. It is a pivot top and hence automatically amount to strong support and resistance. Despite Bitcoin's strong bearish momentum over the last few weeks, it still respected this level before plunging down to $30,000.
2) This level is exactly where the previous local high is. Bitcoin needs to take out this area in order to establish a higher high.
3) The EMA200 is right at this level. Until we can break above and stay above it, that EMA200 will act as resistance on its own.
This is an absolute pivotal level. Bitcoin may very well be on its way towards new all-time highs already, and that reversal may have been firmly established - but until it breaks above the $42-42,5k zone, Bitcoin is HIGH RISK. This could all prove to have been one nasty dead cat bounce to punish any off-the-bat optimists who automatically become bullish when things go up and equally bearish whenever Bitcoin moves down.
As we're here to play the odds, any longs below this area come with high risk and low statistical return. It's like rolling a die and get 1:1 whenever you're correct. You may still win, but it won't take you long to land in the poor house.
For more detailed analysis, please follow us on Youtube (Long Life Trading)