Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.
After the rise from 555, Bitcoin continues to range between two important Fib levels.
Let’s take a closer look at the BTC/USD chart on the thirty minute timeframe:
The FBS CopyTrade Team Presents a New 'FBS CopyStar' ContestGo to article >>
I’ve performed the Fibonacci study from the low of the past fortnight at 555, to this week’s high at 590. Sometimes, it can be a bit of a discretionary process when deciding which points to apply the Fib study from and to, with multiple locations having potential of being a decent place for a swing low or swing high. However, in this case today, it’s sheer mechanics. Remember, not only is 590 the high of this week, but, at the same time, it is a very important resistance line, because on the higher timeframe of the Daily, it represents the first major Fibonacci retracement level of 23.6%, as mentioned in yesterday’s analysis. Hence, when zooming into today’s technical analysis, specifically on the M30 chart, we know there’s no room for discretion here when performing our intra-day Fib study. I.e. we have the low at 555, which was actually a double bottom pattern, and we have the latest high at 590. So, simple – just perform the study from these two points.
Now, take a look at the candle marked with a red ellipse. This is a very bearish candle for a few reasons. Firstly, it possesses a very long upper wick, comprising fifty percent of the actual stick itself. The actual entire upper wick also completely above the upper Bollinger band. Then on that same candle, the Accelerator Oscillator closed as red, whilst the Stochastics were by now heading downwards from an overbought position. Unsurprisingly, there was a relatively quick move down to the 61.8% Fib level, which was tested twice in quick succession, marked in blue circles.
Right now, price is hovering around the 23.6% Fib level, and I still hold we could see a re-test of 590 soon.
Learn more at http://www.forexreversal.com