Bitcoin is attempting to rally. Will it have the strength to smash through resistance? Covered: Bitcoin Gets The Bounce Cause For Concern The Bullish Case The Bearish Case Closing Thoughts Bitcoin Gets The Bounce Since the open of yesterday’s daily candle, the Bitcoin price plummeted down almost 9% into the $55k range, as the Crypto […] The post Bitcoin Bouncing, But Not Out of The Woods Yet appeared first on CryptosRus.

Bitcoin Bouncing, But Not Out of The Woods Yet

Bitcoin is attempting to rally. Will it have the strength to smash through resistance?

Covered:

  • Bitcoin Gets The Bounce
  • Cause For Concern
  • The Bullish Case
  • The Bearish Case
  • Closing Thoughts

Bitcoin Gets The Bounce

Since the open of yesterday’s daily candle, the Bitcoin price plummeted down almost 9% into the $55k range, as the Crypto Fear and Greed Index hits levels of fear not seen since the end of September.

However, over the course of the past 12 hours, the Bulls have stepped back in to attempt a recovery.

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The current daily candle is looking quite strong, showing a big green body with a bullish wick to the downside.  But now, we find ourselves fighting key resistance.  Let’s zoom into the hourly chart to analyze the most recent price action to try a get a sense of which direction the market may be headed.

Cause For Concern

Bitcoin has reclaimed about 5% since coming off if its recent local bottom of about $56,500, and is currently trading just under $58,000.  If you read yesterday’s analysis, you would know that one potential scenario we were looking out for was a rejection at our old support of $58,000.

And that is exactly what seems to be happening at the time of writing.

In the image above you can see a perfect rejection off of our line at just above $58,000, with a drop off in volume.  At the same time, the one-hour RSI (Relative Strength Index) is already beginning to diverge bearishly.

This can be seen as a higher high forming on the RSI, and a lower high printing on the price chart (see the image below).  This suggests that a short term pull back might be getting ready to set up on the one hour chart.

The Bullish Case

If the bulls are to continue to push the price higher, what we want to see is the price hanging out and consolidating just below $58,000 for the next several hours or so.  Any push above that level should be accompanied by a surge in volume, followed by hourly candles beginning to close above that level.

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It may look something like the image below.  If the price breaks above resistance without a rise in buying volume, the possibility of a fake out seems likely before a move lower.

The Bearish Case

However, we are starting to see a rounding off of the local top that may be forming, with the price moving lower.  If the price continues to fall, look for potential support to come in at the 20 Simple Moving Average on the one hour chart (yellow line).

If that breaks, expect a back test of the previous swing low, sitting at $55,625.  If one hour and four hour candles begin to close below that level, the probability of a move down to the $53,000 – $50,000 seems likely as discussed in yesterday’s post.

 

Closing Thoughts

There are signs that the Bitcoin price is reaching a bottom and getting ready to move higher, but I remain unconvinced.  Do not be surprised to see another push down before we start moving back to the upside with strength.

Find yesterday’s analysis here:

Epic Battle Between Bears And Bulls Heats Up As Bitcoin Hourly Candles Close Below Support

The post Bitcoin Bouncing, But Not Out of The Woods Yet appeared first on CryptosRus.