Bitcoin price quickly returned to its previous consolidation zone during Sunday trade. The verdict in the ongoing case of Bulls vs. Bears remains inconclusive.
Time of analysis: 00h00 UTC
From the analysis pages of xbt.social, earlier today:
A swift move higher puts price back in the center of its two-month consolidation zone.
One concern is that today’s advancing wave had gone “too far too fast” and then lost momentum. In the bitcoin chart such a high energy blast – during low weekend liquidity – often results in downward continuation.
A second confirmation that advance could return to decline can be found in the 1-hour RSI indicator’s reverse divergence: the buying spree had caused RSI to form a higher high, while price only made a lower high and did not exceed the previous high near $423. Technically, this phenomenon often results in price falling into a correction. If the direction of trend remains down, then upside reverse divergence (such as we see) typically implies a new price low.
However, if the market has returned to consolidation mode, then price may retrace today’s advance by 30% to 50% before continuing higher. Pushing higher will print a five wave advance from yesterday’s low and will shift the bias to bullish. Although still unconfirmed at this time, a five wave structure in this position of the consolidation pattern since early March will shift interpretation towards a base for advance.
Bitcoin price fulfilled yesterday’s advancing scenario by rapidly returning to above $420. If the bulls can buy price up in another wave, then chart bias will become bullish. For now we have a three wave structure, which is a corrective price pattern. Dropping to a new low from current levels will be medium-term bearish. The coming 24 hours should cast new light on the larger direction of trend.
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Bitcoin price charts from TradingView.
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