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December 9, 2018
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Bitcoin

Bitcoin’s Path To The $7450 Major Resistance

Bitcoin -0.48% (Bitfinex) found a little bit of momentum, forming higher lows and higher highs within an ascending channel on the 4H chart since 31 October. BTCUSD -0.48% did fall out of the channel this morning and is currently within a small descending broadening wedge , however, StochRSI is oversold and RSI is fast approaching oversold on the 4H so I don’t expect it to drop lower than $6360 before the momentum starts picking up again for a bullish break out of the broadening wedge towards our first target at $6600 which will take it back inside the ascending channel .

If the move takes place with strong volume and conviction from the bulls, then the next target will be a move up to the top of the channel and 0.38 fib resistance at $6832. This move may lack the volume to stay inside the channel, however, since oscillators are heading towards overbought territory on the 1D chart, so there may be a slight correction back to the larger uptrend support before resuming an upwards move back towards the channel at $6832 and 0.382 fib resistance. Once $6832 has been successfully tested as support, next target is $7015 at 0.5 fib and then $7197 resistance at 0.618 fib. Once $7197 has been cleared as support then BTCUSD -0.48% should reach the $7457 major resistance at 0.786 fib. Price should then either break out of the channel to the upside for a December Christmas rally towards $8500, or the $7450 resistance may prove to be too strong with low volume , in either case there should be a retreat back towards the larger uptrend support around $6660 at the end of December.

29 December 2018 is decision day for the Van Eck ETF but the SEC may defer the decision one last time to 29 February 2019, in which case I expect the price to fall below the larger uptrend support for a retest of the 2018 annual lows. If the Van Eck ETF does get approved, this may be the catalyst for the bull run starting in Q1 2019. If the ETF is rejected on 29 December, there may be bearish capitulation in January and the bull market may only potentially begin in Q2 if there is ETF approval on 29 February 2019. If the ETF is rejected on 29 February 2019 then we may be in for an extended bear market until the market finds a catalyst to attract new investors, however, Van Eck seems confident that they should receive approval with all the recent institutional developments in the space and mitigation of prior concerns so let’s see.

Good luck and happy trading!

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