Bitcoin has been ranging for the past few days, and it looks like this may well continue for the rest of the week, due to a number of factors I’m observing, specifically on the Daily chart. I’m performing the Fibonacci study from the low of the month at 342, until the high of the month at 545.
During yesterday’s analysis, I mentioned, “We do have the Stochastic Oscillator heading down however, along with the Accelerator Oscillator as red, so I’d expect another test of the 38.2% at 467 later today”, which duly occurred, as can be seen on the BTC/USD D1 chart below:
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The thing is, if we perform a longer term (this time bearish) Fibonacci study, i.e. from the high at 700 during early March, to the low since then at 340 (which we actually used as our initial 100% line for the above shorter term bullish Fib study), then we’ll notice another factor – the 38.2% Fib retracement line at 478.
It’s a key factor here because it’s clear that 38.2% has become a sticking point – over the past few days price has returned to this line without fail; dojis and spinning tops becoming the norm, with equal length lower and upper wicks, yet without much of a body.
So how long will this ranging carry on for? That’s the million dollar question. I am confident however, that we’ll see further consolidation for the rest of today, and probably tomorrow as well, because there are still conflicting technicals; for example we have the Stochastics crossing down from an oversold territory, yet we have the Accelerator and Awesome Oscillators turning green. In my experience, often when this happens, we’re going to see choppy price action, which has been proven to be the case this week.