Bitcoin price is edging higher as Gold is whip-sawing near its 2016 highs. With Classic(TM) looking to be heading the same way as XT, the market may feel renewed confidence in the integrity of Bitcoin. Today’s analysis proposes a few technical confirmations that should be observed before betting on the upside.
Time of analysis: 14h30 UTC
From the analysis pages of xbt.social, earlier today:
The general mode of trade appears to be using the MAs as support for slow upward progress. The 1-hour chart MAs (not shown) seem to have an xbt.social buy signal forming, but before we prepare to trade to the upside, let’s remember yesterday’s illustration of how the market is painting itself in a corner. Today’s 4-hour Bitstamp chart reinforces the analysis that upside potential is limited.
Firstly, above the current area of price action there looms the descending trendline (pale blue) that will require some negotiation. Before we go long, we should watch for a breach of this line.
Secondly, less than $5 above price there is an ascending Fib line that had caused price to react (or reverse) on several prior occasions during 2016. Even if there is sufficient bullish conviction to continue advancing, this Fib line could cause correction before letting price pass.
Thirdly, a look at RSI (second from top) shows that the indicator will soon hopelessly reverse diverge to the top of the previous correction if price continues advancing. The stochastics (top) are also grouping in overbought territory – not necessarily the end of advance, but a condition that warns of a pullback.
If the market trades price higher, despite the indications mentioned above, then we can expect a move to one of the local wave highs since late February. It is likely that price pulls back below the overhead Fib line or, at least, retest it from above. The critical chart event we want to see is that price does not reverse back into decline from the 4hr 100MA (orange).
There may be some bullish potential here, but observe the additional confirmations, discussed above, before making a directional bet.
What do readers think? Please comment below.
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Bitcoin price charts from TradingView.
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