Analysis provided by Ashton Fraser, learn more about his trading strategies at the Lasers forex forum.
After last weeks’ mild price hike from 565 to 600, this week has definitely been a bear affair, thus far. It’s interesting to note that the channel we spoke about last week continues to hold, but for how much longer remains to be seen.
Over the weekend, I posted the following BTC/USD Daily chart:
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Where I mentioned, “Bitcoin appears to be trading within the confines of a very specific channel, determined by two key retracements levels, clearly observable on the Weekly timeframe, when applying a Fibonacci study. It’s hard to see this channel letting go of price this coming week, thus we’re likely to see further meandering between these two levels.”
Well, if we take a look at the current Bitcoin chart on the Weekly timeframe, whilst applying the same Fibonacci study, i.e. from the high of this year at 1000, until the low of this year at 300, we can see this meandering in action (click to expand):
It’s the strong support at the 38.2% Fibonacci retracement level at 565 that is keeping price from sliding down any further for now. However, after a number weeks implying bullish potential, we’re now slowly beginning to see some signs of future bearish strength, specifically aided by the Accelerator Oscillator, which has just turned red. We also have the middle Bollinger band, (which is actually 20 simple moving average) heading south. Will this be enough to allow price to break below 38.2%? Arguably, although there are still quite a few bullish indicators at play, making it likely for there to be further ranging for the rest of the week.
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