What’s up traders,
Back again with the daily bitcoin breakdown. Yesterday we saw price do a couple fakeouts of the bearflag we talked about, ultimately returning back to the original consolidation level. Now, we are teetering along support trying to make new highs.
Here, we can see that bitcoin dipped into that 62.8%-79% sweetspot that we like to see on our fibs and then bounced strongly to the upside. 224 is a key intraday level that bitcoin must break to gain upward momentum and start a bigger bull move. Consolidating and holding this 222-223 zone would be a nice indication that bitcoin is poised to take out those 224 highs and move higher. However, price at the 223-222 currently does not look very strong, and it may be preparing to break down and dip back into our fibonacci sweet spot levels. This result would still be a short term bullish scenario as long as the 218 lows were not taken out.
Now, if price is to go below 218, then our daily key price level at 215 is a prime target.
215 is a huge price level for bitcoin, and a break of this level would spell very bad news for price. But there is some evidence that may suggest that bitcoin could be building up for a reversal.
An important thing to know about reversal patterns in general is that they take longer to form than continuation patterns do. If price can consolidate for a while, it is usually a suspicious sign that the trend may be changing and gearing up for a breakout. There’s a lot to be excited about with this daily chart:
So, when we look at the daily chart we see that price has entered into our sweetspot retracement level. I say to ignore the Coinbase pump wick because it is basically an abberation. Furthermore, we see that price has reacted bullishly upon entering this area at a previous key level of support. Currently, bitcoin is trying to put in a higher high which would add even more confluence to the bullish behavior seen in price at these levels.
Overall, if price can hold here for a couple more days, then we are looking to get a significant bullish reaction off of 215, but like we said earlier… the reversals take longer to form than the contunations. The safe bet as a bull is to take a couple days and look at intraday resistance levels being overtaken and turing support. This is a good indicator that buyers are interested in bitcoin at these prices. Then you can confidently make your move and scoop up some bitcoins. Bears need to really be wary if bitcoin were to stop and consolidate in this area, and not marry the position. Bears need to see price break down soon or else they could be in trouble.
That’s it for this report, but I’ll be back tommorrow,
Good luck, good trading.