Bitcoin price has made the characteristic corrective C-wave that curves back down to the initial A-wave low. Although we cannot be sure that the downside correction is complete, we do know what to look out for to confirm advance.
Time of analysis: 15h20 UTC
From the analysis pages of xbt.social, earlier today:
Price action has looked close to a sell-off on several occasions during the past days, and each time, failed to drop away.
The market had an opportunity, this morning, to descend into short-selling behavior, which it let pass. The current low does not yet show divergence in the RSI indicator – in other words, the price low and the RSI low correspond, proportionally, to the previous A-wave low. This lack of divergence may indicate that another low may be due today or in the coming days, although the price pattern of this morning’s low looks to be of the advancing variety when viewed at 5min timeframe.
Either way, the starter-gun is still on safety: the 4hr 20MA (green) is turning up, but for us to have confirmation of advance, and to commit to a trade, we want to see the 1hr moving averages ascending. If we see price advancing above rising 1-hour MAs with MACD also pushing above its zero-line, that will be the time to open trades.
Experienced traders control risk, inexperienced traders chase gains. – Jim Rohn
The orderbooks (below) are top-heavy with sellers at the moment, implying the market is either expecting a downturn from resistance near 2600 CNY and $390, or that there are cautious profit-takers at that level. Regardless, traders should consider buying into the advance when they notice the following triple-whammy in the 1-hour chart: price advancing above a rising 20-period moving average as it crosses above a rising 200-period moving average.
Bitfinex orderbook depth and Buy/Sell Volume:
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Bitcoin price charts from TradingView.
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