Hi friends hope you are well and welcome to the new update on Bitcoin. After showing little bit upward move the price action of Bitcoin started another down rally after 24th of June. In today's article we will try to understand what the price action of BTC can do next.
Formation of bullish Shark:
On 26th June I posted an article where I revealed that the price action of BTC is completing the final leg of bullish shark. This was not the first harmonic move on daily chart after forming two BATs now the price action of Bitcoin has formed another harmonic pattern. Therefore as per Fibonacci sequence of Shark I predicted that the price action may move down from $8979 up to $8809 to complete this shark. And then as per Fib sequence, the price action can move up from this potential reversal zone. And finally the price action has completed the final leg as predicted and at this time it is moving above the potential reversal zone
Now if we switch to 2-day chart. Then different support and resistance levels can be noticed. And we can see that after been rejected by the strongest resistance of $10,000. The price action has broken down the $9500 support and at this time the price action is re-testing the next support level at $8800 this is the same level where we have the PRZ level of bullish Shark. In case of breaking down this support the price action may move to the next support at $8200.
The role of SMAs:
Now if we watch the different simple moving averages with the time period of 25, 50, 100 and 200 on daily chart. Then price action had already broken down the 25 and 50 simple moving averages. Therefore a downward move up to 100 and 200 SMAs was expected. Because the 25 simple moving average was also likely to form a bear cross with 50 simple moving average just above the priceline. And this bear cross can put more pressure on the price action to downside. But as the Bitcoin has also completed the bullish Shark pattern so if the potential reversal zone of this Shark will work. Then price action can be reversed from here and we may see the price action will be moved above the 25 and 50 simple moving averages. Once BTC will have the support of 25 and 50 SMAs then we can expect that the price action will find a good support above $9,500 as well.
Due to the support of potential reversal zone of Shark we may see a short term or midterm bullish rally like we have witnessed short term bullish rallies after the completion of the previous two BAT patterns. Once the price action will again find a firm support above $9,500 then it might make another attempt to break out the $10,000 resistance level. However, if the potential reversal zone will be broken down then we can expect the price action might move down to the next support at $8200.
Note: This idea is education purpose only and not intended to be investment advice, please seek a duly licensed professional and do you own research before any investment.