After a bleak few days, Bitcoin appears to be showing signs of strength.
Let’s take closer look at the latest BTC/USD H4 chart below (click to expand):
I’ve performed the Fibonacci study from the high of the weekend at 455, until the current low at 413.
UTIP Platform Now Supporting Chinese QuotesGo to article >>
As can be seen, we had four consecutive strong bear candles, and at that point it was pretty hard to see any bulls having a say. However, there was a special reversal pattern in the making. The last bear candle, (marked with an orange number 4) had two characteristics which could indicate some indecision entering the market, in that it’s upper and lower wicks were of equal length, and the candle itself closed below the lower Bollinger band. But it was the next candle, circled in blue, which really gave us confidence in some sort of retrace occurring. You can see how it a) opened below the lower Bollinger band, b) closed as a bull candle, c) possessed a relatively long lower wick, yet NO upper wick whatsoever.
All three pieces of information purely based on price action tell us that the bulls are gathering together. But besides price action, there were other indicators aiding this contemplation, such as the Stochastic Oscillator approaching oversold territory and on the next candle, we had the Accelerator Oscillator bar turn green. Eventually the Awesome Oscillator and the Parabolic SAR also followed suit.
Thus, price headed up to the major Fibonacci retracement level of 61.8% at 440, where, as I’ve circled in red, it’s been tested twice already. Will price test it for a third time today? Arguably, since we still have a lot of the technicals showing bullish signs. Whether it will be broken, I doubt – due to the fact we’re seeing the AC as red, and actually, on the Daily timeframe if we perform a longer Fib study, we can see that the 23.6% Fib is providing decent resistance: