BTCUSD local accumulation top rejection confirms bearish mood

Bitcoin's price action reached the top of the accumulation area at $8 800 today. The price sharply went down afterwards which indicates weakness and insufficient of volume. Market players have not enough power to break the parallel channel moreover the support of a smaller channel was broken down which represent a rejection of another attempts to go higher in the short term

Accumulation range started after a sharp decrease from $9 490 to $8 034 level on 24th of September. The phase lasts for 16 days already while today's rejection of local top $8 800 level confirms that we will have another week of gradual decrease before another attempt to break out of the range happens.

Bitcoin's price can go higher from this point in the short term which provides us a good entry for leveraged scalping. Nevertheless afterwards we will keep short position until the price reaches $7 987 - $7 923. Reaching (1) and (2) points will create a possibility of sooner breaking upward from the channel and the accumulation range. Forecasted local top of such movement is $8 980

Stay tuned to this idea, we will share updates and strong signals according to price action development.

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It was mentioned that we expect a short term increase which can be used for scalping before the core analysis takes power. We received confirmation of this scenario from BB strategy and revealed Hidden bullish divergence. Divergence is known to be a leading indicator of price action. In other words, when you see a divergence, there is a high likelihood that price action will potentially make a reversal. Price action has higher lows while price oscillator demonstrates lower lows which confirms a presence of hidden bullish divergence.

Bullish divergence is positive and occurs in a down trend when the price action prints higher lows that are supported by lower lows of oscillating indicator. This indicates a weakness in the down trend as selling is less urgent or buyers are emerging. When the oscillator fails to confirm the higher lows on the price action, it can either makes higher lows further, which is more significant, or it can make double or triple bottoms which leads to burst growth. The latter occurs more often on oscillators, such as RSI and Stochastics that are range bound and less often on oscillators such as MACD and CCI that are not range bound.

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