On the hourly analog Bitcoin Bitfinex snapshot we have a nice rally from where we last left off yesterday where price spring-boarded from this $8,250 level all the way up to the turquoise .65 retracement at $8,500. Volume started to slow down overnight and headed southward to $8,080 at 2pm EST today.
Price is now bouncing on the outside of the up-trending and heading back through that black horizontal line at $8,275. I think that price could continue a little bit higher over the next few hours here, possibly back to that .618 green Fibonacci retracement level, but then it would be critical to look for some resistance.
There could be an inverse head and shoulders top forming over the last two days, which I have included on the snapshot. Just as price rebounded efficiently from the inverse head and shoulders on the daily chart a week or two ago, the opposite could be true on this hourly chart.
Price would not move as much on a validated head and shoulders top here, but it could be enough to take it back down to the red down-trending line at $7,750 or possibly all the way back to the $7,500 black horizontal support level. I have also moved the target accordingly. Both levels would be a nice range for price to consolidate for a few days before the next big move.
The RSI here reset down to 38.22 from the lows of 8,080 earlier today, but is already passing neutral territory at 57.39 on the move over the last few hours. An uptick in volume here should be enough to authenticate that head and shoulders top if the bears can hold it. There is also some bearish reversal divergence from price on the RSI and OBV as indicated by the purple trend lines.
The MACD is bearishly trending downward and is about to swing below the zero bound into bearish momentum. It’s trending upward the last few hours here, but I do not think it will last.
On the daily analog Bitcoin Bitfinex chart, you can see today’s candle currently holding above that $8,250 as support. Ideally some consolidation between the black lines between $8,250 and $7,500 would be a healthy development. Price definitely needs to revisit this red down-trending line though to test the resolve of the bulls for their higher prices.
Since price is now above the 200 day EMA at $7,869, that would naturally be a good support level as well, just like it was for a few days back in April.
The RSI has topped out well into overbought territory currently sitting at 73.57 and is due to retrace the next few days. I don’t think this bullish trend has completed yet, but some pullback and consolidation is needed to reposition for the next move.
The MACD also looks almost too optimistic and ready to flatten out a little in the short-term. The OBV is trending upward still as highlighted by the lines of that purple channel, which is a good sign for the bulls and any break of that line would not be a good. I find it interesting that even though the OBV did not indicate any bearish divergence back in late April and May there was a defined rising wedge pattern that was broken.
I also wanted to add another bonus chart of the Wyckoff Accumulation Schematic as I applied to the chart of Bitcoin on Bitstamp. I mentioned it yesterday and thought it would be worth a look. It would be amazing it the market actually played out that way. Hope you enjoy it. Have a good evening.
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