Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
Bitcoin has been rising steadily since the early hours of this morning, but has hit some major resistance.
Let’s take a look at the hourly chart on BTC/USD below (click to expand):
We can see how price was hovering around the middle Bollinger band for a lot of the weekend. It soon started to rise at a cool pace, initiated by a combination of technicals.
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I’ve drawn a white vertical line, to show this combination. At the close of this bullish candle, price had crossed above the middle Bollinger line, the Awesome Oscillator had turned green, the Accelerator Oscillator had turned green, and the Stochastic Oscillator had crossed over, heading upwards, whilst being underbought. Pretty ripe for a few bulls then.
Hence, price rose to 590, before witness to a long bearish candle, which retraced down to the 38.2% Fib level, around 570, which is where price is currently at.
To understand why price suddenly stopped at 590 however, we need to zoom out a little:
Now it becomes much clearer. The red horizontal resistance line shows the clearer picture. We can see how it’s now acted as a resistance on three occasions, circled in blue. However, with the AC and AO still in bullish mode, we could see another test of this line later today.