Bitcoin continues its April recovery. The Fibonacci extension level at 161.8% I spoke about at the end of last week seems to be holding firm.
I also mentioned,
“With the technicals still pointing to some more bulls, I’d expect further such tests within the next few candles.”
Indeed, not only were there further tests, but eventually a break – which has now led price to rise even higher, reaching a price mark of 470. However, the continued recovery seems to hit a snag. And that snag has just occurred in the past couple of hours actually.
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Take look at the current BTC/USD hourly chart below:
I’ve performed the Fibonacci study from this month’s low at 410, to the current high at 470. We can see how price on the previous candle (circled in red), has just dropped to and tested the 32.6% Fib retracement level at 456.8. Ok, so we have a Fib test, no big deal. The problem is though, I fear this is not just a one off test – we’re extremely likely to see further tests, and ultimately I expect price to break 23.6%.
There are very strong reasons for my anticipation of such a move. Firstly, look how uninterrupted the Accelerator Oscillator has been, for a number of candles, likewise the Awesome Oscillator. Then we also have the Stochastics now heading down in smooth trajectory manner, emanating from an overbought position.
Hence, I’m looking for a drop to the 38.2% Fibonacci retracement level later this afternoon.