Bitcoin is reaching some key areas. I've been pointing out the 4 ascending resistance lines it needs to break through before beginning any major bull run. Here they are again for your review...
Zooming into the 4 hour chart, we can see it's hit the first resistance line, but has not yet been able to break through. That said, we don't see a major rejection either. It's just bouncing right underneath. The more it tests the resistance, the weaker the resistance gets. If it can break through today, that'd be great sign of strength.
Let's quickly review the bullish and and bearish scenario I've been discussing these past few days.
The bearish scenario has bitcoin in 5 waves down...currently on wave 5 of 5. I've highlighted the sub-waves in yellow.
The bullish scenario has bitcoin in 5 waves up. If this count is correct, bitcoin is currently on wave 3. Here's how it may play out.
The 1 hour RSI has developed a descending line of resistance. A break through would be another sign of a strengthening market.
The 4 hour chart shows a nice ascending line of support. A decisive break (more than a wick) below this line may indicate a coming trend change.
The 4 hour RSI is operating within a wedge. For now, we need it to remain within or above this wedge to validate the bullish count.
Looking at the 4 hour chart, we can see the 8, 21 and 55 day EMA are in a bullish order (8 top, 21 mid, 55 bottom) and fanning out away from each other. This is a sign of strength.
Finally, we continue to watch the 4 hour MACD as it moves tighter and tighter within the formed wedge. It looks like we may see a breakout within the next 3-7 days.
Let's keep an eye on these indicators. Things are certainly starting to get interesting.
BIAS:
Short Term: Neutral
Longterm: Very Bullish
I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Thanks for stopping by.
Disclaimer: I am NOT a financial advisor and this is NOT financial advice. Please always do your own research and invest responsibly. Technical analysis is simply a guide. It doesn’t predict the future. Anyone that claims they know exactly what’s going to happen is foolish, lying or both. Technical Analysis should only be used as a tool to help make better decisions. If you enter a trade, I recommend having a stop loss and sticking to it. You will loose at times. The key is to have more wins than losses. With that in mind, I wish you great success.
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