Bitcoin - After a successful push, what's next ?
As predicted, bitcoin broke resistance. The move was violent so the retracement might also be. That said, a lot of people missed out on this and will want to buy back. Previous 6.8k resistance has probably became support, needs to be tested to confirm.
1) Support and Resistance
Now that we have finally broken the resistance, price needs to test it once again for it to be considered as support and so that the uptrend can continue. However, the first wave retraced to the 0.618 fib level, if we apply Elliot Wave theory here, the third wave should not retrace more than 0.382.
Next resistance is at 7.7 (drew it a little bit above), whether we keep going from here or we retrace back to previous resistance that will maybe act as support, we need to break 7.7k or down we go and things could get ugly.
2) RSI
RSI successfully found support on the 40ish level (first black box) and has broke the 60-65 zone which tends to be pretty bullish (see Constance Brown). It's now stuck at resistance (second black box) that formed on April 24th. If it were to come down a break of the 50ish level would worry me a little bit.
Overall bullish but caution is required.
3) Volume
Volume spiked up crossing over the 14 MA as for OBV, it clearly broke out. However it is slowing down, even though sellers are pretty shy for the moment, they can kick in at any moment.
Neutral.
4) Price Action
The wicks tell us there is a lot of sell pressure between 7,475 and 7,6 however the sellers are not quite present yet.
Neutral.
In conclusion, I will definitely not be opening any long position here as the risk to reward is awful. We are much closer to resistance than support. That said, I will not be entering a short position either, I will wait for us to hit resistance (if we do) and then take a short if bears>bulls.
As for the green box, it's of course my buy zone IF and only IF price shows buying here is a good option. Why? Even though we can't claim this is a support zone yet (though I mentionned "resistance turned support" on the chart) there is a high chance price will bounce off of it. The green box was drawn between the 0.382 (which usually serves as support for wave 3) and 0.5 fib (which is at previous resistance levels). I would place my stop loss halfway between 0.618 and 0.786 fib levels, as if we reach this zone, I think price is likely to collapse.
Just my thoughts, if you have any comments or constructive criticism you are very welcome.
1) Support and Resistance
Now that we have finally broken the resistance, price needs to test it once again for it to be considered as support and so that the uptrend can continue. However, the first wave retraced to the 0.618 fib level, if we apply Elliot Wave theory here, the third wave should not retrace more than 0.382.
Next resistance is at 7.7 (drew it a little bit above), whether we keep going from here or we retrace back to previous resistance that will maybe act as support, we need to break 7.7k or down we go and things could get ugly.
2) RSI
RSI successfully found support on the 40ish level (first black box) and has broke the 60-65 zone which tends to be pretty bullish (see Constance Brown). It's now stuck at resistance (second black box) that formed on April 24th. If it were to come down a break of the 50ish level would worry me a little bit.
Overall bullish but caution is required.
3) Volume
Volume spiked up crossing over the 14 MA as for OBV, it clearly broke out. However it is slowing down, even though sellers are pretty shy for the moment, they can kick in at any moment.
Neutral.
4) Price Action
The wicks tell us there is a lot of sell pressure between 7,475 and 7,6 however the sellers are not quite present yet.
Neutral.
In conclusion, I will definitely not be opening any long position here as the risk to reward is awful. We are much closer to resistance than support. That said, I will not be entering a short position either, I will wait for us to hit resistance (if we do) and then take a short if bears>bulls.
As for the green box, it's of course my buy zone IF and only IF price shows buying here is a good option. Why? Even though we can't claim this is a support zone yet (though I mentionned "resistance turned support" on the chart) there is a high chance price will bounce off of it. The green box was drawn between the 0.382 (which usually serves as support for wave 3) and 0.5 fib (which is at previous resistance levels). I would place my stop loss halfway between 0.618 and 0.786 fib levels, as if we reach this zone, I think price is likely to collapse.
Just my thoughts, if you have any comments or constructive criticism you are very welcome.
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