Bitcoin continues to swim through key support and resistance zones, with this pattern likely to carry on for the short term at least.
Let’s take a closer look at the latest BTC/USD four hour chart below (click to expand):
I’ve performed today’s Fibonacci study from the low of the month at 343, until the high of the month at 545.
I’ve drawn a white rectangle to highlight the two key support and resistance lines, namely the 23.6% and 38.2% Fibonacci retracement levels at 497 and 467 respectively.
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It’s becoming quite clear what’s happening, as a Bollinger squeeze is in formation, just look at how compressed the upper and lower Bollinger lines are becoming, tightening price, which will ultimately lead to a break out. In fact, not only are the upper and lower Bollinger lines heading in a horizontal direction, they’re now actually converging together. I explained yesterday how “I wouldn’t be surprised to see another test of 483 within the next few candles.” This has happened a few times since then, with 467 now becoming the main point of support.
Even if we zoom out to the Daily timeframe (see chart below), to try and observe a potential trend in the making, it’s hard to envisage, since the previous few days tells us something pretty obvious, i.e. a clear pattern here of ranging; it’s vital to pay heed to what the candlesticks on their are telling us:
A multitude of spinning tops and doji’s over the past few days, as I talked about in my previous analysis:
“There is a clear struggle between the bulls and the bears, each of them attempting to set the tone for this coming week.”