Technical Analysis Update
Another end of week rally?
As Bitcoin’s price stabilizes and demonstrates little relative volatility interim, we’re assessing momentum, chart formations, and moving averages in an attempt to hone in on the asset’s next move.
We observe a falling wedge breaking out to the upside. With a potential for a retest in the range of $6,420–$6,470
Overhead short positions are stacked and staggered between $6,592 and $6,651.
The case of volume being low has been a main concern for bulls and bears, and the culprit for the lack in volatility. Over the last week we saw bears exert much more volume than bulls, with higher volume price discovery sells to the downside.
The first high volume bull push came in some 12 hours ago, and in terms of net volume, this initial first upwards gust is the largest BTC has experienced in a week.
Bullish volume is appearing to defend the Ascending Triangle Formation. With an early attempt at the retest of the triangle’s top, and the second attempt at the triangle’s support zone.
The case for Volume to the upside grows as VPVR’s High Volume nodes are underneath price action.
Wednesday’s daily close as a dragonfly doji candle brings optimist for bulls, as typically after a down-cycle, dragonfly doji candles dictate upcoming upswing.
Currently we’re eyeing three key levels to note:
200 Period Moving Average,on the 4-hour chart.
This resistance is the key area short sellers are defending. This coincides with our chart from the first section highlighting the high sell-side volume between $6,592 and $6,651.
The longer term inspection of BTC demonstrates much friction with this term moving average after an extended consolidation period. Consolidation showing in-favor of and ascending triangle that’s currently supported by bullish volume that’s keeping the triangle intact.
A breach of this moving average and the above resistance zone can send BTC into a rally for a short-squeeze.
Above we indicate 3 key areas, a good buy zone, a danger/stop loss zone, and a breakout zone.
A breakout is to occur at the breach of the 4hr, 200 period ma.
The red zone below our ascending triangle is the danger zone, price breaching below the triangle and closing there can mean two things. A massive stop hunt/false breakout to the downside, or the invalidation of the triangle.
A downwards break of the triangle will put BTC and a long position in uncertainty zone.
From Last Week,
When we published an incoming new heading and direction for BTC in 72hours, on the 25th which was followed by a rally on the 27th.
Pre-rally, we observed many intra-day bullish formations. The below chart is from the 9–26 and 9–27.
A cascading series of bullish intra-day formations. As for the current state, seeing a falling wedge cascaded above an ascending triangle that’s being defended by bullish volume, indicates optimism for bulls and continuation of last week’s heading.