Analysis provided by Ashton Fraser, learn more about his trading strategies with the Forex Reversal indicator.
Over the weekend, Bitcoin continues to move gently within the Bollinger Squeeze.
Now, there’s something very interesting taking place. A confluence of resistance zones is preventing price from pushing up.
I’m going to perform two Fibonacci studies for BTC/USD. Firstly, on the H1 chart (click to expand):
As can be seen, I’ve performed the Fibonacci study from the low of this month, on the 1st, at 530 to the high of the month on the 4th, at almost 700.
New Trading Ideas, Multicharts, and Live Widgets with SimpleFXGo to article >>
We can see how price has been testing the 38.2% Fib retracement level for a few days now, at around 635.
Then moving on to a different timeframe, if we take a look at the BTC/USD chart again, (but this time on the H4 timeframe, click below to expand), whilst performing the Fib study from the major swing low on the 25th of February at 430, until March’s high at 700, we can see how price has tested the 23.6% Fib level on multiple occasions.
And it just so happens, that the 23.6% Fib level on H4, is at exactly the same point as the 38.2% level on H1 – at 635. A perfect confluence of Fib lines.
What this tells us is that 635 is now a very strong line of resistance, and it would take some major bulls to break this zone. I don’t expect that to happen any time soon, due to other technicals still implying a shallow bearish wave is about to form, where a drop to 620 may ensue.
Learn more at http://www.forexreversal.com