There were more personal tech issues yesterday that resulted in no post, however we are back today with a new look at the Crypto-market where prices are at a very critical juncture. Come in and let’s take a look.
On the hourly analog Bitcoin Bitfinex chart, we can see how price came down from that corrective B wave on Wednesday and with no follow-through from the bulls, price headed south quickly. Price found support around that green .618 Fibonacci level at $6,170 that I was targeting on the overall Elliot Wave Cycle, and much faster than expected.
The bulls put a strong resistance against all the bears coming in yesterday before giving way to the $6,079 level and then taking price up $200 within the same hour. Price has hovered around the $6,241 level for most of today, before another spike up to $6,340 and quick downdraft back to a low of $6,125 in the last few hours here.
There’s a giant indecision doji from 4pm EST that spans about $1000 and I have put a blue rectangle around this area between $6,220 and $6,120 that could contain price for a while before another rally takes place.
Regardless, $6,100 to $6,000 has been a strong level for the past few months now and indicating that a bottom could be in, with the price breakdown to the $5,700 - $5,800 levels on June 24 and 28, being a failed breakout for the bears.
I have put a Fibonacci Extension from the low from last night and on the swing high and low from today and if price doesn’t stay in this rectangle and moves back up quickly, we could price around that green target of $6,386 in convergence around the black 200 hour exponential moving average.
The good news is we have had some nice volume over the last few hours here, so hopefully it can continue to and price can move higher. I don’t see a whole lot of movement that could happen to the downside especially after that big doji today, but the bottom side of that rectangle at $6,125 is could be a reasonable target.
The RSI is currently at 42 which is getting close to the oversold region, but the important thing of note is the bullish divergence drawn with the lime green line on the RSI that supports prices lows yesterday, and continues to support the price lows from today.
The MACD is a bit wonky as you can see from the circled area, price got a bid after the blue trigger line crossed the zero bound, but someone wants to see the bearish momentum continue and price was hammered back down shortly thereafter.
On the daily analog Bitcoin Bitfinex chart, this inverse head and shoulders bottom is really shaping up to be something, if the volume can continue to increase. The low from yesterday at $6,079 looks like a beautiful right shoulder and price would just stabilize slightly increase over the weekend.
All of the moving averages are stacking bearishly still from the black 200 EMA all the way down to the turquoise 21 day EMA, but it was good to see price breach that 21 day level back on July 2nd, to shows some signs of life that it may want to turn around. Price is back below that level now, but it’s the first test on turning the ship.
Next stop potentially is the orange 55 day EMA at the neckline of that head and shoulder bottom at $6,850. If price does manage to get to there I would expect it to shoot through it on a nice bull rally that many have been waiting for, with that third target at the 1.618 orange Fibonacci extension line at $7,850. That also converges with the red down-trending line containing price for the past few months.
Bearishly, if volume doesn’t materialize and price does get pushed through that $6,150-$6,000 region again, I would expect a retest of that lime green support line at maybe and $5,700 again and if no bounce there, off toward $4,900 in a capitulation event. I don’t think that will happen, but I have been wrong before.
There is still some nice bullish divergence on the RSI underlined by the lime green line here. It would be nice to see the RSI currently sitting at 41.05 dip back into an oversold level like 40 and ideally back to the trend line at 35, but it very well would be ready to take off from here.
The MACD is curling down bearishly, but if price moves sideways, I could see it hovering for a few days before moving up with price as well.
I will be off on vacation next weekend, however may get a post or two up. Have a good weekend!
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