Hey guys and gals hope you are well and welcome to the new update on Bitcoin. As the Bitcoin is being rejected by the strong rejection line that is also the resistance of a big symmetrical triangle. Therefore in today's post we will try to understand whether the Bitcoin will drop all the way down to the support of this symmetrical triangle at $6000 or not.
A bullish reversal pattern on 12 hour chart:
As my previous article we have seen that the price action of Bitcoin is forming different harmonic patterns with the continuity. After forming to BATs now the price action is completing the final leg of another harmonic Shark. The potential reversal zone of this Shark starts from $8979 and ends up to $8809. This potential reversal zone should be set as stop loss because if it will be broken down then the price action can move to the next support at $8,200.
The support and resistance levels:
After being rejected by the 10,000 dollar resistance the price action also has broken down the $9,500 support and moving towards the next support at $8800 this is the level where we also have the maximum extent of the potential reversal zone of the bullish Shark pattern that we have discussed earlier.
SMA supports:
The price action also has broken down the 25 and 50 simple moving averages. Now we don't have any significant support of simple moving averages between 50 and 100 SMAs. Therefore it is expected that if the price action will break down $8800 price level support then it can move more down to the next available moving average support and that is SMA 100 and at the moment that is at $8,200.
Priceline is rejected by pennant resistance once more:
Price action is also moving in a pennant on the daily chart. In my previous post I was expecting that after hitting at the support price action may move up to the resistance of the pennant and might hit another spike up to $10,000. I was using the combination of three indicators for this purpose the stochastic Momentum and MACD. We can observe whenever the price action is moving at the support of this pennant then these three indicators start turning bullish the price action moves up to the resistance of this pennant. This time it happened again but after reaching at resistance finally the price action droped down at the support again. At the moment the price action is again at the support of the pennant.
The major resistance and symmetrical triangle:
The major resistance for the priceline is not only the $10,000. This is the rejection line that is also the resistance of a very big symmetrical triangle that started from 2017. And it can be easily observed whenever the priceline is reaching at this resistance it has been rejected since 2017. At this time the Bitcoin is at this resistance. The price action is struggling break this resistance out. If the price action will again reach at the support of this symmetrical triangle then and we may see $6000 level. Because that support comes at this level and we have another support of 200 simple moving average at the same level. However on the long term we have very strong signal and that is the order of the simple moving averages with the time period of 25, 50, 100 and 200. At this time we have the biggest time period moving average below all MAs. Now we need the 25 simple moving average that is the smallest time period moving average to move above all the moving averages to complete an open alligator mouth by the simple moving averages that can lead the price action to really very big parabolic bullish move.
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Conclusion:
On the short term the price action may move down from $8979 up to $8800 for the completion of bullish Shark. But on the long term the Bitcoin is still expected to start a very big parabolic bullish move.
Note: This idea is education purpose only and not intended to be investment advice, please seek a duly licensed professional and do you own research before any investment.
