Nine months of downtrend, five months of consolidation, LTC may have finally found a bottom after a flush wave 3 break above the 200 day MA, with a new trend emerging in what appears to be a bow formation and a broadening wedge.
One of the xteristics of a broadening wedge is it ability to gather strong moment on either direction hence the strong move up towards the daily resistance area where we got rejected.
With series of higher low formation on the daily and weekly, and with RSI pretty overbought on the daily and stoch way above the 80% level, i did expect a strong move downwards to cool off RSI.
However, there is a confluence of support just below. The 0.5 fib retracement level, the trend line support of the broadening wedge, and the historical monthly support.
This area of strong support is critical to hold in order to give us our daily higher low formation to complete wave 4 before the next leg up. A fake out could see price retesting the 0.618 fib level where lots of price action took place in past, and a nice bounce back into the wedge.
My area of interest is the 0.5 fib level where we have a nice amount of support. With volume piling up, I did expect a strong bounce from this support area with lots of momentum to resume the trend on wave 5 all the way to our second target.
NOTE: Bitcoin's aggressive move in coming days could alter our trade set-up here. Either way, we still have nice amount of support at 0.786 fib level which will mean another trade opportunity.
One of the xteristics of a broadening wedge is it ability to gather strong moment on either direction hence the strong move up towards the daily resistance area where we got rejected.
With series of higher low formation on the daily and weekly, and with RSI pretty overbought on the daily and stoch way above the 80% level, i did expect a strong move downwards to cool off RSI.
However, there is a confluence of support just below. The 0.5 fib retracement level, the trend line support of the broadening wedge, and the historical monthly support.
This area of strong support is critical to hold in order to give us our daily higher low formation to complete wave 4 before the next leg up. A fake out could see price retesting the 0.618 fib level where lots of price action took place in past, and a nice bounce back into the wedge.
My area of interest is the 0.5 fib level where we have a nice amount of support. With volume piling up, I did expect a strong bounce from this support area with lots of momentum to resume the trend on wave 5 all the way to our second target.
NOTE: Bitcoin's aggressive move in coming days could alter our trade set-up here. Either way, we still have nice amount of support at 0.786 fib level which will mean another trade opportunity.
