After Bitcoin’s deliberation manifesting itself with respect to what seemed like relentless consolidation over the past few weeks, it’s about time we saw some serious action, which came in the form of some powerful bulls, and they have continued to impose themselves this weekend. Having said that, price has hit some resistance, marked by key Fib levels, which could play an important role in determining market action this week.

Let’s take a closer look at the latest BTC/USD Weekly chart below (click to expand):

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I’ve applied the Fibonacci study to the high and low of this year, which are actually two very powerful psychological whole numbers, i.e. from the swing high of 1000 during the first week of 2014, until the low at 300, during early February – a stark reminder of how quickly things can change in the crazy world of crypto currencies.

Anyway, check out the three candlesticks marked in blue, which corresponds to the period from the 27th of March until the 17th of May. Notice how they are all exceedingly small candles; with the first two being typical spinning tops. Such types of price action, i.e. multiple consecutive spinning tops and dojis can often indicate a trend reversal, and whilst on its own it’s not enough, there are other bullish technicals, most prominently the Accelerator Oscillator which has turned green for a number of candles. In addition, we had the Stochastic Oscillator (10,6,6) approaching oversold territory, and has in fact just crossed over. So it’s of little surprise that price managed to break the 23.6% Fib retracement level at 463, although the rapid hike to the next major Fib of 38.2% at 565 (marked in red), where price is currently residing, was quicker than many expected. Now, we may see some stalling here, since Fibonacci retracements on higher timeframes can be very powerful

However, this 38.2% Fib level on the Weekly isn’t the only reason. There’s actually a confluence of Fib levels taking place – as 565 also equates to the 61.8% Fib level, if we perform a shorter study, this time on the Daily timeframe (click below to expand):

This time our study spans from the high of March at just below 700 till the low of last month at 342.

The parallels couldn’t be clearer. Namely, the 38.2% Fib level on the Weekly is at the same location as the 61.8% Fib level on the Daily.

So what does this all mean for Bitcoin going forward this week? Well, for the short term at least, it tells us that price is probably going to struggle to rise beyond 565, not helped by the overbought Stochastics, and, if the Accelerator Oscillator turns red early this week (on the Daily), we may well see some bears take a bite out of this green apple.