On the hourly analog Bitcoin Bitfinex chart, price hasn’t done a whole lot over the past 24 hours besides move downwards about $75, but it looks like there is some bearishness on the horizon.
I have drawn dark blue two lines that represents a rising wedge that is currently containing the price well and typically break to the downside. I would have thought that bearish move from 6am EST this morning would have tapped the downside of that wedge, but the bulls are freeing price a currently at $6,575.
I really think a retest of that 55 EMA in orange is due before any consideration of another extension upward, but we could get some clues in the next hour or two, as price is just drifting to the outer resistance on wedge that should force price to make a decision either way.
I slipped a quick Fibonacci retracement on here as well from the last upward move yesterday and currently price has tracked back to the red .236 Fib level at $6,583, but I think we could potentially drop back to the .5 level in green at $6,472. That might just be a wick downward from the 55 EMA which could be a good springboard higher, but if this continues sideways into tomorrow that support may find itself converging with the purple 100 moving average as well.
The RSI has reset nicely to neutral levels and at 49.2 and any move downward will help it enter overbought territory quickly which the bulls should gobble-up in this up trend. If they don’t that should be a warning sign.
The histogram on the MACD is slowly starting to trend upward from below the 0 bound territory, which is a good sign for the bulls, however the blue trigger line has not started curling upwards yet, so price may continue sideways for a bit longer.
I have also added the KST indicator which means Know Sure Thing and is a momentum oscillator that shows compiles 4 different rates of change on differing weighted time frames that can basically be used like the RSI and MACD to find divergence in price as well as buy sell signals.
It’s similar to the MACD in the function of reading it, but the timing is a little different. I thought I would just try it out for today. Anyway you can see the bearish divergence on the MACD and KST, which I have highlighted with the pink line. The RSI indicator is showing a little bullish continuation momentum though, so don’t be surprised if there is a fake-out up to around $6,775 and then down out of this wedge.
On the daily analog Bitcoin Bitfinex chart, there is not a whole lot to update from yesterday, but I wanted to provide the idea of a big inverse head and shoulder pattern here.
You can see the left shoulder being the downward move from June 13th and the head being the low from June 24th. That would make the neck line slightly downward sloping and currently around where we are right now at $6,650.
If price does begin to roll over the next few days, this could be a potential scenario that could play out, where price heads back down to $6,100 as a right shoulder, everyone starts freaking out about $4K levels again and then price reverses on huge volume confirming the bottom and subsequent uptrend leg.
In an ideal world this would also confirm bullish divergence for a third time on the pink RSI trend line I have drawn at around 34.91 and then spring off that level, possibly up to that green target around $7,000 by July 13th. Obviously that $6,100 level has been providing strong support for a few months now and I definitely think it could hold up again if tested.
The MACD and KST are also quite dead right now sitting below the zero bound, but are beginning to trend upward. The ship may begin to turn bullishly, but ships are also slow to respond in changes of direction. The opposite of the euphoria many were experiencing back in December and January. Have a good holiday if your celebrating.
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