BTC/USD Technical Analysis – 12th March 2014

Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies. From early yesterday morning, Bitcoin has been

Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.

From early yesterday morning, Bitcoin has been slowly rising, incorporating some minor retraces along the way.

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Let’s take a closer look at the BTC/USD chart on the fifteen minute chart.

btcusdm15_12_03_2014

I’ve performed the Fibonacci study from the low of yesterday at 610, until the high of today at 636.

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We can see the price area I’ve marked with a white circle on the chart. Look at the number of consecutive candles that crossed the upper Bollinger band. This often tells us, that despite the fact price is moving up pretty strongly, it’s impossible for that to continue, due to the general tendency of the market to move back into the bands.

In which case, we need to look for other signs. Firstly, support and resistance. Look at how many times price tested the red resistance line I’ve drawn. Five times in a space of eight bars. This is significant, and immediately tells us the growing strength of the resistance. Remember, this is a fifteen minute chart, so we’re not talking about an exceedingly powerful resistance, but on a relative scale (M15), it is as I mentioned, significant enough to warrant a potential retrace or reversal.

Then, moving onto candlestick patterns, if we observe the fifth (which was the last) candle to touch the red line, we can see how long it’s upper wick was. There was virtually no lower wick. The same applies to the following two candles, i.e. longer upper wicks, no lower wicks, plus they closed as bear candles.

Within the next couple of candles, we now had other indicators corroborating our price action. Specifically, the Accelerator Oscillator and Awesome Oscillator had both turned red, in conjunction to the Stochastics crossing downwards. The initiation of the retrace we envisaged by way of the price action I mentioned above was now in full flow. In fact, price retraced all way to 50%, marked in blue.

Right now, price is hovering between 50% and 23.6%, where I expect it to remain for the next few candles.

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