Analysis provided by Ashton Fraser, learn more about his trading strategies with the Forex Reversal indicator.
Bitcoin continues to test a certain level this morning, so far unable to break it. Will it be broken today?
Let’s take a closer look at BTC/USD on the four hour chart (click to expand):
How to Prepare for CySEC’s New Tiered LeverageGo to article >>
I’ve performed the Fibonacci study from the major swing low on the 25th of February at 430, until March’s high at 698.
Straight away, we can see what’s happening. We had an initial retracement and bounce off the 38.2% Fib level on the 8th of March at 595 (circled in blue). Since then however, the 23.6% Fibonacci retracement level is holding firm as a strong resistance at 635, and over the past four days it’s been tested over half a dozen times.
As a result, the Bollinger Bands are becoming tighter and tighter, and actually have now reached a horizontal state, where all three Bollinger lines are headed purely eastwards, which is clear proof of consolidation if ever we needed it.
I expect the 23.6% level to be re-tested on more occasions over the next few candles, as we have both the Accelerator Oscillator and the Awesome Oscillator turning red. In addition, the Stochastics are heading upwards. However, due to the strength of the resistance at 635, I can’t see a break as of yet.
Learn more at http://www.forexreversal.com