Up, Down, or Sideways?
After failing to break the heavy resistance at 6800, BTC made a truncated 5th wave (of what looks like the 5th wave of the 1st wave up from the downtrend), and broke down in a short period of time. So far the solid resistance of 6250-6300 has held steady and daily candle is green. I am still bearish (as we are still clearly in an overall downtrend) at least until the end of August where we will hopefully have bottomed out, or be very close to it. The current level of support that BTC has found falls almost perfectly on the .5 FIB retracement line. The .5 is often a strong level but if it breaks, we should be looking around the 6100's which is the .618, and almost a 1 to 1 extension from the 5800's bottom at the end of June. This is possible but less likely if we are able to hold the support and form higher lows.
On the daily chart we seemed to have formed a bullish harami candle, and if we close with this, my short term bullish sentiment of at least retesting the 6800 resistance will be more certain. I have found other examples of this set up (circled in purple) where the trend has broken down and then bounced back up. This is not always the case, but something I feel is possible. We also appear to be forming the right shoulder of an inverse head and shoulder pattern on the daily as well. If we are to bounce from this level and break the resistance, then I will be targeting between 7100-7200 since that is right around where the 100 EMA lies and that resistance is very strong as well.
Last, there does appear to be some bullish divergence on the daily RSI as well, and is by no means in the overbought zone which leads me to believe that there is still a bit more room to go upwards before another massive sell off and another long drop to the downside.
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On the daily chart we seemed to have formed a bullish harami candle, and if we close with this, my short term bullish sentiment of at least retesting the 6800 resistance will be more certain. I have found other examples of this set up (circled in purple) where the trend has broken down and then bounced back up. This is not always the case, but something I feel is possible. We also appear to be forming the right shoulder of an inverse head and shoulder pattern on the daily as well. If we are to bounce from this level and break the resistance, then I will be targeting between 7100-7200 since that is right around where the 100 EMA lies and that resistance is very strong as well.
Last, there does appear to be some bullish divergence on the daily RSI as well, and is by no means in the overbought zone which leads me to believe that there is still a bit more room to go upwards before another massive sell off and another long drop to the downside.
**Please like and comment! thank you!
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