Analysis provided by Ashton Fraser, learn more about his trading strategies at Forex Reversal.
Bitcoin continues to rise over the weekend, but has it now hit some resistance?
Lets take a look at the H4 chart on the BTC/USD below (click to expand).
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I’ve done my Fibonacci study from the high of the 14th at 690 until the low of the past week at 513. Now as a reminder from last week, I mentioned how there was a fantastic reversal pattern forming on the 21st, as a candle had opened and closed below the lower Bolllinger band, circled in blue. We then needed some confirmation of this potential reversal, and we managed to get that within the next couple of candles, as the Stochastics had crossed upwards whilst being undersold, and the Accelerator Oscillator had turned green. The Awesome Oscillator soon followed suit.
We then saw some consolidation before another push up, with the Stochastics still being very bullish. In fact, price rise all the way this morning, until it hit the 61.8% Fibonacci level. Indeed, the 61.8% Fib level has really stopped Bitcoin in it’s tracks, almost vowing that it shall not pass, also aided by another technical factor in that price is hovering above the upper Bollinger band.
Furthermore, we can now see how the Accelerator Oscillator has just turned red, with the Stochastics nearing overbought levels.
For these reasons, I strongly expect price to drop this afternoon until at least the 50%, possibly touching the 38.2% Fib level by the end of the day.