Hi friends hope you well and welcome to the new update on Bitcoin. As the price action of Bitcoin has bounced from the support of $8800. In today's article we will try to under whether this support will be retained or the price action will move more down.
As in my previous articles I've been showing that the price action of Bitcoin is forming different harmonic patterns on the daily chart. Firs priceline formed two BATs and now the price action of BTC has completed the formation of Shark pattern. And from the potential reversal zone the priceline of BTC has moved up and at this time the price action is in the Fibonacci projection of C to D leg of this Shark pattern from 0.382 to 0.786 Fibonacci level.
Price action is bounced from $8800 support:
Now if we switch to two day chart to watch the different support and resistance levels. Then the price action has bounced from the $8800 support and moving towards the $9,500 resistance level. If the $9,500 resistance level will be broken out then the price action will be reached at strongest resistance that is $10,000. And in case the price action will break down the 8800 dollar support then the next support level would be a $8200 and in case of breaking down the $8200 support the next support would be $7,500. So at this time, the price action has two strong supports one is at $8800 and other one is the potential reversal zone of bullish Shark that also ends up to $8800.
New channel formation:
Previously we were observing that the price action was moving in a pennant but the support of the pennant has been broken down. Now the price action has started its movement in a new parallel channel. The support of this channel is $8800 and the resistance is at $10,000. At this time the priceline of BTC has bounced from support and likely to move up to the resistance level but before $10,000. At this time we can also observe that the momentum is changing from bearish to bullish. And this change was started on 29th of June. The MACD is also turning bullish and on 30th of June the stochastic also has given the bull cross. The bullish signals from these indicators on the daily chart and the bounce from the channel’s support are also strong hope that the price action may reach up to the $10,000 resistance level.
The most significant signal that no one is noticing:
Now I would like to draw your attention toward a very important and significant bullish signal. That no one is noticing. If you watch the simple moving averages on the long-term weekly chart with the time period of 25, 50, 100 and 200. Then it can be easily noticed that 200 simple moving average is below all the other simple moving averages. Then we have 100 above 200 SMA. Now we need the 25 simple moving average above the 50 simple moving average when this bull cross will be formed then the complete order of these SMAs will be: 25 simple moving average above all then 50 then 100 and 200 simple moving average would be below all other SMAs. Then a completely opened alligator mouth by the simple moving averages will be formed that can be really very helpful to start a powerful bullish divergence as it happened back in 2017.
The price action of Bitcoin has three major supports. Number one is the potential reversal zone bullish Shark and number two is the 8800 dollar price level support and number three is the channel support. And the indicators are also turning bullish therefore we can expect that the price action may try to reach the resistance of the channel that is at $10,000.
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.