Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
Bitcoin might still be ranging, but now showing signs of a drop.
Lets take a look at the M30 chart on BTC/USD (click to expand):
As we can see, price has been up and down for the past couple of days, contained pretty much between the 61.8% Fib retracement level at 570, and the 23.6% Fib retracement level at 550. Likewise, the Bollinger bands have been following a similar sine wave pattern.
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Right now, price is at 550, i.e. the 23.6% Fib level, something which I mentioned was going to be a sticky point. We might expect some more ranging, since on M30 at least, the technicals are rather conflicting, as in we have the Stochastics oversold, but the Awesome Oscillator is showing some bearish strength. In fact this pattern has been replaying itself over the past 48 hours.
However, we really need to zoom out to the H4 chart to see what the overall picture may entail once this consolidation period comes to an end. See chart below (click to expand):
Once again, we see price at the 23.6% Fib level. When you get such a confluence of Fibonacci retracements on different timeframes, know for a fact that level is of greater significance. No wonder it’s been acting like such a magnet for a number of days now.
However, its magnetic powers may soon be coming to an end, because take a look at the latest technicals are telling us. Both the Accelerator Oscillator and the Awesome Oscillator have turned red, whilst the Stochastics are now on a smooth slope heading downwards. Hence, it’s possible may drop to the 38.2% Fib level at 530 by the weekend.