Bitcoin ( BTCUSD ) retraced strong. We caught the last peak, now we are seeing that a new low has been set.
Bitcoin 4H Time Frame
Bitcoin can surely move up from current levels, I’ve drawn the main scenario I see developing on the chart above.
Let’s take a look at why and at some of the main signals below:
- We can see a huge decline, I mean massive after the top of the 5th of August, it reached oversold yesterday, massively oversold down to 13.88. Bitcoin tends to bounce when it reaches such levels on the RSI.
- The purple arrow marks the hidden bullish divergence. This shows up when the trend is up (Higher lows) while the indicator is down (Lower lows).
- After the dashed red trendline is broken, you can expect the RSI to move higher and higher.
- Here we can see that Bitcoin ( BTCUSD ) touched the outer part of the Bollinger Bands, to quickly bounce. The price always trades within these bands… This is a great indicator.
- On the bounce, a bullish candlestick formed. You can see it marked on the chart. The large wick at the bottom means the rejection of sellers.
- High volume is good, supports the bounce. Also supports the bounce back into the Bollinger Bands as well as the bullish candlestick and break above EMA5.
- So unless the bears do a massive push down and break the last low set, Bitcoin is very likely to move higher from here and challenge the next resistance levels.
1- Do not invest in every ICO – most of them are a scam.
2- Crypto is a heavily manipulated commodity and the price can change at any moment.
3- The creation cost of a coin represents the “wholesale” price – It is always better to buy when the price is close to the creation cost.
4- Crypto has a natural cash flow that dictates the selling pressure. Like, 1800 bitcoins are mine each day so 1800 bitcoin must be bought at the current price (“means market needs new $18 millions of investment every day if the price is $10,000 to maintain the current price“).
5- Patience and timing are key to making a profit:
Buy, when the price is close to the creation cost.
Sell, when the price is way high off the creation cost.