Yesterday's price action (long black candle - BEARISH ENGULFING !) which pushed sharply down the BTC towards a low of 37'701 (nearly filling the TRIANGLE TARGET @ 37'581), triggered a BULLISH DIVERGENCE...
Therefore, on short term and it'is exactly what is going on, a recovery should take place; nevertheless and in order to confirm a TACTICAL REVERSAL, the BTC should recover and close on a daily basis, at least above the middle (39'295 of the yesterday's long black bearish candle which is also by the way the area of the former daily support congestion !
This only will be the first step of this potential recovery as, as long as the BTC does not make a closing level, above the closing level (40'440) of the last white bullish candle, the trend will not change and the downside risk will remain !!!
LAST BUT NOT LEAST IN THIS DAILY PICTURE, THE BTC IS WELL BELOW THE BOTTOM OF THE CLOUDS RESISTANCE AREA WHICH IS ALSO CONFIRMED WITH THE LAGGING LINE...
CONCLUSION. :
ANY RALLY, FOR THE TIME BEING SHOULD BE SEEN AS A CORRECTIVE MOVE ONLY (TACTICAL COUNTERTREND PRICE ACTION) AND NOT AS STRATEGIC REVERSAL YET; THEREFORE, ANY TACTICAL LONG POSITION SHOULD BE MONITORED VERY CAREFULLY AND MANAGED WITH STOP LOSS ACCORDINGLY !
KEY LEVELS IN THIS DAILY TIME FRAME ARE RESPECTIVELY :
DOWNSIDE : 37'000 (ONGOING PRIMARY UPTREND SUPPORT LINE)
UPSIDE : 40'500-40'800 (FORMER HIGHS)
IMPLICATIONS :
DOWNSIDE BREAKOUT OF THE PRIMARY UPTREND SUPPORT LINE :
A failure to hold and close on a daily basis above the 37'000 area would be seen as a NEGATIVE SIGNAL, calling for lower levels towards 34'325 (February low) ahead of 32'950 (January low)
Then, below the 30'000 area (psychological support) and last but not least THE VERY IMPORTANT KEY STRATEGIC SUPPORT @ 28'600 (double top trigger level !)
RECOVERY ABOVE THE FORMER HIGHS (40'500 - 40'800:
A successful recovery and a closing level above this area would momentary neutralise this ongoing downside risk and put again the BTC in a TACTICAL UPTREND.
IMPORTANT TO NOTE THAT THE PRIMARY DOWNTREND LINE RESISTANCE IS CURRENTLY @ 45'600
4 HOURS
RSI BULLISH DIVERGENCE CONFIRME BY A BULLISH ENGULFING PATTERN
R1 : 38'500
R2 : 38'917
R3 : 39'717 (38.2% FIB RET 42'979 -37'701) and also the middle of the long black bearish candle seen yesterday afternoon (40'484-38'572 !)
On the downside a failure to stay and close (H4 closing basis) above the recent low @ 37'701 would reactivate the downtrend and put the focus towards the levels previously mentioned in D1
1 HOUR
RSI school case ...
On April 25th we saw a BULLISH DIVERGENCE which trigger a move from 38'202 towards a high of 40'800 (first top)
Then a second top also @ 40'800 which triggered this time a BEARISH DIVERGENCE which pushed the BTC down again from 40'800 towards a low of 37'701.
Finally this morning a BULLISH DIVERGENCE took place (potential double bottom with its trigger level @ 38'462)
WATCH ONGOING PRICE ACTION AS AN HOURLY CLOSING above 38'462 WOULD ACTIVATE THIS DOUBLE BOTTOM FORMATION FOR A TARGET @ 39'223, which roughly match with the KIJUN-SEN (or base line), currently @ 39'250
A failure to activate this double bottom in progress would put again the BTC under selling pressure with the focus on the former low of 37'701.
As usual, monitor closely price action from intraday short term time frames to longer time frames which will help you to catch early and intermediate validation or invalidation signal of what has been mentioned in longer (DAILY and 4 hours time frames)
Have a nice trading day.
Any comment are more than welcome.
Regards
IRONMAN8848 - Jean-Pierre Burki
Therefore, on short term and it'is exactly what is going on, a recovery should take place; nevertheless and in order to confirm a TACTICAL REVERSAL, the BTC should recover and close on a daily basis, at least above the middle (39'295 of the yesterday's long black bearish candle which is also by the way the area of the former daily support congestion !
This only will be the first step of this potential recovery as, as long as the BTC does not make a closing level, above the closing level (40'440) of the last white bullish candle, the trend will not change and the downside risk will remain !!!
LAST BUT NOT LEAST IN THIS DAILY PICTURE, THE BTC IS WELL BELOW THE BOTTOM OF THE CLOUDS RESISTANCE AREA WHICH IS ALSO CONFIRMED WITH THE LAGGING LINE...
CONCLUSION. :
ANY RALLY, FOR THE TIME BEING SHOULD BE SEEN AS A CORRECTIVE MOVE ONLY (TACTICAL COUNTERTREND PRICE ACTION) AND NOT AS STRATEGIC REVERSAL YET; THEREFORE, ANY TACTICAL LONG POSITION SHOULD BE MONITORED VERY CAREFULLY AND MANAGED WITH STOP LOSS ACCORDINGLY !
KEY LEVELS IN THIS DAILY TIME FRAME ARE RESPECTIVELY :
DOWNSIDE : 37'000 (ONGOING PRIMARY UPTREND SUPPORT LINE)
UPSIDE : 40'500-40'800 (FORMER HIGHS)
IMPLICATIONS :
DOWNSIDE BREAKOUT OF THE PRIMARY UPTREND SUPPORT LINE :
A failure to hold and close on a daily basis above the 37'000 area would be seen as a NEGATIVE SIGNAL, calling for lower levels towards 34'325 (February low) ahead of 32'950 (January low)
Then, below the 30'000 area (psychological support) and last but not least THE VERY IMPORTANT KEY STRATEGIC SUPPORT @ 28'600 (double top trigger level !)
RECOVERY ABOVE THE FORMER HIGHS (40'500 - 40'800:
A successful recovery and a closing level above this area would momentary neutralise this ongoing downside risk and put again the BTC in a TACTICAL UPTREND.
IMPORTANT TO NOTE THAT THE PRIMARY DOWNTREND LINE RESISTANCE IS CURRENTLY @ 45'600
4 HOURS
RSI BULLISH DIVERGENCE CONFIRME BY A BULLISH ENGULFING PATTERN
R1 : 38'500
R2 : 38'917
R3 : 39'717 (38.2% FIB RET 42'979 -37'701) and also the middle of the long black bearish candle seen yesterday afternoon (40'484-38'572 !)
On the downside a failure to stay and close (H4 closing basis) above the recent low @ 37'701 would reactivate the downtrend and put the focus towards the levels previously mentioned in D1
1 HOUR
RSI school case ...
On April 25th we saw a BULLISH DIVERGENCE which trigger a move from 38'202 towards a high of 40'800 (first top)
Then a second top also @ 40'800 which triggered this time a BEARISH DIVERGENCE which pushed the BTC down again from 40'800 towards a low of 37'701.
Finally this morning a BULLISH DIVERGENCE took place (potential double bottom with its trigger level @ 38'462)
WATCH ONGOING PRICE ACTION AS AN HOURLY CLOSING above 38'462 WOULD ACTIVATE THIS DOUBLE BOTTOM FORMATION FOR A TARGET @ 39'223, which roughly match with the KIJUN-SEN (or base line), currently @ 39'250
A failure to activate this double bottom in progress would put again the BTC under selling pressure with the focus on the former low of 37'701.
As usual, monitor closely price action from intraday short term time frames to longer time frames which will help you to catch early and intermediate validation or invalidation signal of what has been mentioned in longer (DAILY and 4 hours time frames)
Have a nice trading day.
Any comment are more than welcome.
Regards
IRONMAN8848 - Jean-Pierre Burki
