BTC/USD Technical Analysis – 22nd April 2014

Bitcoin continues to swim through key support and resistance zones, with this pattern likely to carry on for the short

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):

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btcusdh4_22_04_2014

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:

btcusddaily_22_04_2014

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.”

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