Bitcoin this morning failed to close above a key Fibonacci level, resulting in some bears pulling rug from under the bulls’ feet. Will the bulls fight back? Possibly – the weekend will see to that.
Let’s take a closer look at the latest BTC/USD Daily chart below (click to expand):
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I’ve performed the Fibonacci study from the high of the month on the 16th at 545, until the low of this week on Monday, at 413.
I talked about the dynamics of the Stochastic Oscillator yesterday, explaining, “it’s very likely the %K line shall cross the %D line by tomorrow. If so, I believe 23.6% won’t be able to hold, and we could see a rise to the 38.2% Fib line at 463.” Well, as we can see, that hasn’t quite happened yet – indeed, it’s plainly obvious that the 23.6% Fibonacci retracement level at 444 is really becoming a firm point of resistance, it’s simply not allowing price to go beyond it, and what I predicted earlier this week in that “we could see this battle continue for a few days to come”, has come into fruition. Each time the bulls threaten to take price above 444, the bears, aided by 23.6% halt them in their tracks, with rejection after rejection. That’s four times in four days price has threatened to break.
Either way, I maintain that as long as we’re seeing the core technical indicators providing us bullish signs, such as the Accelerator and Awesome Oscillators as green, along with the middle Bollinger line heading upwards, then I believe price shall continue to test the 23.6% Fib at 444 over the weekend. Whether it can break this level, is another matter, since as we’ve seen, that line is becoming increasingly sturdy – it may well reject price, sending it back down with further vigour.