Analysis provided by Ashton Fraser, learn more about his trading strategies at Forex Lasers.
As Bitcoin continues to be limited by the 50% zone on the Weekly timeframe, swimming steadily near three month highs, it seems we’re about to see another test of this month’s low at 600.
Over the weekend I posted the following BTC/USD Daily chart:
Where I mentioned, “we could see another test of 600, which in conjunction to being the first major Fib level (23.6%), is also a psychological round number. It’s clear for everyone to see the conflicts being presented here across the various timeframes, ultimately boil down to one thing, consolidation, which I expect shall continue at the start of this week.”
NEXT BLOCK SOFIA 2.0 + Fabulous Blockchain After-PartyGo to article >>
So it’s of no surprise that this is precisely what has happened so far this week. In fact, ever since the last test of 600 exactly one week ago, the candlesticks have been of fairly equal size, virtually all of them possessing small bodies and generally equal upper and lower wicks, namely a multitude of spinning tops, as can be seen on the latest Bitcoin D1 chart below (click to expand):
I’ve performed the same Fibonacci study as the weekend, i.e. from the low at 410 on the 6th of May, until the current high. Due to the seemingly random nature of crypto currency trading, one could be forgiven for not paying importance to a single spinning top, but with so many consecutive spinning tops, as we’ve seen since the 4th, it’s practically impossible to ignore. Put simply, we have classic ranging in action, and with so many conflicting indicators on different timeframes, this could continue for a few days yet.
Despite this ranging price action over the past few days, there is still potential for a testing of the 23.6% Fibonacci retracement level at 600, primarily due so many of the indicators giving us bearish signs, such as the overbought Stochastics, which are creeping south, the Accelerator and Awesome Oscillators as red, and as of today, we can throw in the Parabolic SAR into the mix as well, as this morning the dot appeared above the daily candle.
Either way, I expect price to remain within the boundaries of the channel I’ve drawn on the above chart for the rest of the week, i.e. between the current high and the 23.6% Fib.
Learn more at http://www.forexlasers.com