What’s up traders,
Back again on a Wednesday, and bitcoin is still looking weak. Eight out of the last ten days, price has seen heavy selling, and one must ask how much longer can it last until we see a retracement?
Let’s look at an hourly chart for some clues:
Price is on the lower end of the range between the daily 233.55 and 214.59 price levels. Usualy we look for a 61.8% to 79% retracement within a range as shown by the fibonacci levels on the price chart. However, bitcoin is stuggling to even retrace a modest amount. This is know as “staircasing” when price drops down and then goes flat with no retracement because it looks like stairs stepping down.
Staircasing occurs when there is no interest at a particular price level where buyers are super excited to enter the market and cause a retracement upwards. The end result is that price will trade lower until bitcoin reaches a level where traders are willing to buy at. Staircasing also works in a bullish environment as well.
In this next chart, we are looking at intraday support and resistance levels, so that we can look out for early signs of price turning bearish or bullish.
Currently, price is sitting on that 219.70 level. It has broken this level but quickly regained it, but it may be an early sign of weakness. If 219.70 breaks down, we could be heading down to the 217 level, and if that breaks we will have to contend with the 215 daily level.
On the bullish side of things, we are looking for price to take out the 222-223 levels to signal a higher retracement may be in the cards for bitcoin. Looking at the candles, however, bitcoin is looking weak.
At the very top of the range (~222) bitcoin ran up trying to break out and was smacked down with the railroad tracks candle pattern. This is a two candle pattern where you have a big green candle immediately followed by a big red candle that completely rejects any upward momentum. This is a sign that heavy selling occured immediately after price reached up into the 222 level indicating that sellers owns this area.
Bitcoin is in an odd spot right now. There are a massive amount of longs taken out on bitcoin, and still price cannot move up. One has to wonder, is this about to expode up, or are all the longs going to get massively squeezed. I can’t say for sure, but I know that if we have these ideas to look at we can get an early look at what price may be doing. I expect that volatility is about to pick up… should be exciting times!
See ya’ll tommorrow,
Good Luck, Good Trading