BTC/USD: Awaiting for Further Confirmation 4H (Aug. 08)

X Force Global Analysis:


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In this post, we analyze Bitcoin's 4 hour chart, identifying key areas of support and resistance, as well as probable scenarios based on technical indicators.

Analysis

- To begin with, Bitcoin has been consolidating within a triangle pattern, forming higher lows and lower highs
- Within the triangle, it is consolidating once again in an ascending parallel channel
- While bears attempted to drive down prices below 11.5k, it merely tested 11.2k and closed above significant support
- The bearish candles show a hammer pattern, in which the lower tail of the candle extends way beyond the length of the body of the triangle
- As a result, bulls have managed to secure the 0.618 Fibonacci retracement support at 11.5k
- However, at the same time, they are having a difficult time driving prices to new highs as well
- There is strong resistance at the 0.786 Fibonacci resistance, the descending trend line resistance, and the mid-trend line of the channel
- The overall trend, however, remains bullish as there has been no bearish confirmation yet
- Prices are trading above the Ichimoku cloud, and the Simple Moving Averages (SMAs) are all aligned in the order of: 20, 50, 100, and 200 SMA
- The Relative Strength Index (RSI) trades at neutral levels, after a bearish divergence having played out on the hourly chart
- While the Moving Average Convergence Divergence (MACD) shows a death cross, the bearish histograms don't demonstrate any meaningful momentum in the bearish trend.
- The Stochastic Oscillator is also at neutral levels, but is about to form a golden cross, indicating potentiality for one last push by the bulls to complete a lower high.

Market Sentiment:

The long short ratio is at 72 to 28, with significantly more long positions than short positions. The market sentiment is dominantly bullish, but smarter investors are coming to the realization that a correction is inevitable. The Crypto Fear and Greed index also suggest that the market is at a state of extreme greed.

What We Believe

While there have been attempts by both bulls and bears to drive prices in a certain direction, there has not been a clear confirmation given for any scenario. Technicals demonstrate decent evidence for both scenarios. However, taking into consideration the fact that Bitcoin has been on a parabolic rally without a healthy correction, and that the market remains dominantly bullish, more weight is added to the probability of a corrective scenario.

Let us know what you think in the comment section below


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تم فتح الصفقة:

As anticipated, we have a higher low within the triangle pattern.

Prices have failed to break and close above the 0.786 Fibonacci resistance, and has also broken down from the ascending parallel channel support.

The RSI continues to show a lack of strength from the bulls, forming lower highs and lower lows. The MACD has also failed to form a golden cross, and the bearish histograms are slowly increasing again. The Stochastic Oscillator, a great indicator for sideways trends, has currently confirmed a death cross.

It is, however, too hasty for bears to think a corrective trend has been confirmed. There is strong support at the 0.618 Fibonacci support, as well as the ascending trend line support from the triangle (marked by the dotted white line), which could potentially form a higher low.

Nevertheless, this analysis remains intact in that more weight is added to the corrective scenario.

تعليق:

This is Bitcoin's daily chart.

Currently, it is painting an ascending triangle pattern, which is typically a bullish continuation pattern during uptrends.

While we have managed to retest 12K, we are struggling for further bullish confirmation, as candles have a hard time closing above the 0.786 Fibonacci resistance.

Candle wicks on both sides demonstrate the bull's attempts to drive prices forward despite the overbought technicals, and the bears' attempt to break a strong support zone during a massive uptrend.

تعليق:

Bears have pushed forward with immense pressure, pushing prices down to 11.1k regions to test support at the 0.382 Fibonacci retracement support.

From an extended ascending channel perspective, the price movement marked by the green circle was a fakeout, and we have seen prices close below the channel support, providing further confirmations for bears.

However, at the same time, bulls have managed to secure the 0.382 Fibonacci support, and the 4H candle closed as a dragonfly candle, indicating signs of strong support, and even a potential reversal from the bulls. A lot of people are still buying the dip, as the long short ratio remains at 70 to 30 despite the huge drop.

تعليق:

From another perspective, adjusting the ascending trend line support, touching the candle close points accurately, we can also see that Bitcoin has broken down from its initial structure, and confirmation has been given.

As mentioned previously, while a potential reversal is probable, as seen by the dragonfly candle formation, there is strong resistance at the ascending trend line now-turned-resistance, and the 0.618 Fibonacci resistance.

We have also broken down through the Ichimoku cloud and are trading within its ranges.

Another interesting fact is that the Exponential Moving Average (EMA) Ribbon has started to form a death cross. As noted by the green circle area, the EMA Ribbon crosses can signal the beginning of a impulsive or corrective trend.