Bitcoin to $4600 on Bitfinex then back towards $3k!
Updated
Bitcoin just broke out of the larger descending channel which i mentioned was possible in my last post update considering the bullish divergence we had on the 4H. The break never had much conviction nor the momentum for a sustained volume spike, which probably means we haven't tapped into the liquidity of the actual bottom just yet and should resume the downtrend after a short bounce.
Considering the depth of the recent crash and extension of oversold conditions, this didn't come as too much of a surprise, although I don't think price will go higher than $4600 before resuming the downtrend to the lower 3ks where the larger rebound back to the 5ks should happen.
There may be a potential cup & handle playing out for a nice trade setup to $4570.
On the 1H chart we have bearish divergence showing a potential drop towards the handle support. I've set my target to $4570 which is 161.8 fib extension from the cup's swing high. This is also a major resistance area and is a similar distance from the bottom of the cup to the handle's breakout level. I'll set my buy order to slightly above the upper trend line of the handle at $4150 (although this may change if we have a higher swing high near the start of the cup's handle).
For this trade to play out and before placing my buy order, the price should not retrace below 50% from the height of the cup so I've set my stop-loss just below this at $3940.
Good luck and happy trading!
Previous chart:
Considering the depth of the recent crash and extension of oversold conditions, this didn't come as too much of a surprise, although I don't think price will go higher than $4600 before resuming the downtrend to the lower 3ks where the larger rebound back to the 5ks should happen.
There may be a potential cup & handle playing out for a nice trade setup to $4570.
On the 1H chart we have bearish divergence showing a potential drop towards the handle support. I've set my target to $4570 which is 161.8 fib extension from the cup's swing high. This is also a major resistance area and is a similar distance from the bottom of the cup to the handle's breakout level. I'll set my buy order to slightly above the upper trend line of the handle at $4150 (although this may change if we have a higher swing high near the start of the cup's handle).
For this trade to play out and before placing my buy order, the price should not retrace below 50% from the height of the cup so I've set my stop-loss just below this at $3940.
Good luck and happy trading!
Previous chart:
Note
Nice squeeze to the upside however I've just realised we have hidden bearish divergence on the 4H chart so not sure we're going to break the $4300 resistance now.Note
We even have hidden bearish divergence on the higher time frames too right up to the 1D chart. Looks like we're heading back to test the $3840 and potentially establish a new low.Note
New chart:
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