Bitcoin fell to its lowest point of March over the weekend, but there are some signs of recovery come a new month.
Let’s take a closer look at the BTC/USD chart on the H4 timeframe below (click to expand):
I’ve performed the Fibonacci study from the high of last week at 590 until the low of March at 445.
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I’ve marked a key candle in a blue ellipse. We can see how this was a spinning top candle, where price did fluctuate throughout the formation of the candle (in this case over a period of four hours since we’re on the H4 timeframe), only for price to end up virtually where it began. This type of candle formation can signify indecision and a possible retrace or reversal, if we have further corroboration.
And that corroboration came immediately after, since the very next candle was utterly bullish in every sense. It had a strong upper body, with a long lower wick which started below the lower Bollinger band, and hardly an upper wick to speak of. The Accelerator Oscillator had turned green, along with the Awesome Oscillator, and we had the Stochastics heading north from an oversold position.
Thus, Bitcoin made some recovery, managing to touch the 38.2% Fibonacci retracement level, which also happens to be the 500 price mark – a very important psychological point of support and resistance (in this case resistance). So we have a confluence of vital lines – the 38.2% Fib and 500, it’s of no surprise the market reacted at this point, falling back down to the 23.6% Fib level.
However, the latest candle is now, surprise, surprise, another spinning top. Yet, with the indicators still all in agreement concerning the bulls, I still expect price to test the 38.2% / 500 line again later on.