Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
This Sunday morning on Bitcoin we’ve seen a slow but steady rise, but price has now hit some resistance.
Let’s take a look at the BTC/USD hourly chart below (click to expand):
You can see the area that I’ve marked with a blue ellipse is when price started to head upwards, since a number of technicals came into play.
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We had the Stochastics in oversold territory, but they were now crossing up, the Awesome Oscillator had just turned green, and the Accelerator Oscillator was actually showing bullish signs a few candle earlier.
There was some stalling for the next six hours or so, (marked with a white oval) where price stayed along the middle Bollinger line, however there was one particular candle which initiated a further slight rise, which I’ve circled in green. The reason for it’s innate bullish nature is for at least three reasons. One, the candle’s lower wick is very long, with hardly an upper wick. Two, price close above the middle Bollinger band, and three – the Awesome Oscillator had turned green.
Hence, BTC/USD rose till 620 – and for a very good reason. Zooming out, we can see how 620 is actually a key support/resistance area, due to it being a Fibonacci retracement level, specifically the 23.6% level:
However, it’s questionable as to whether this level can hold it’s resistance for long, since Stochastics are still heading upwards, whilst the Awesome is still holding some decent momentum.