Technical Analysis on Bitcoin: More Hurdles to Clear

Bitcoin is starting to look bullish. It finally broke out the the wedge it’s been operating in, rising to nearly $6,850, before pulling back and consolidating. Still, there’s many more hurdles to jump over before calling this a bullish trend reversal.

There’s strong resistance between $6,880 and $7,100.

Zooming in, and pulling the fib from swing low to swing high, we can see bitcoin has only retraced to the 0.236 fib level. It’s been consolidating on top ever since. Should it rise without any further retracement, that’d be a very bullish sign. That said, I wouldn’t be surprised to see a pull back to at least the 0.382 fib level ($6,572).

This is still a very uncertain market. Even though we've seen some bullish momentum over the past 24 hours, there’s always the possibility of this being a bull trap....especially with the amount of manipulation that’s taken place in the past.
Some may be waiting to buy the dip. Personally, I think we need to get past the $6,880-$7,100 resistance zone to confirm a real bull break. A logical place to start lattering in would be between $$7,050 and $7,150, with a target of $7,600-$7,730. I’m not saying it’s going to reach that buy zone. It may not. In order to confirm a TRUE bullish break, and follow through, we need to see bitcoin rise above the outlined resistance. Once we get past it, the risk to reward becomes much more favorable.

The 4 hour RSI broke above of the wedge we’ve been watching.

The 1 day RSI has also broken above the descending trend line. This is another bullish indication of a POSSIBLE trend reversal.

The 1 day MACD looks as though it’s about to cross over to the bullish side.

On the 4 hour chart, the 55 day EMA is acting as support. The 8 day EMA has crossed above the 21 day EMA. Both of these are signs the market is strengthening.

Bitcoin is still operating within a descending channel. We need to break out of it to confirm a break from the bearish trend of the past 6 weeks.

From an Elliot perspective, there are many ways this can be counted. Looking at the big picture, the count that looks most likely is the WXY pattern I outlined yesterday. That would put bitcoin in wave B of an ABC correction. Here’s how it may play out:

While I’m still not yet sold on a bullish trend reversal, it’s certainly a possibility. Be vigilant, manage risk, and never fall prey to FOMO. I’m a bull at heart. I'd love to say we’ve seen the bottom...but right now, I’m not certain we have. Until there’s more confirmation, I’d suggest small trades, tight stop-losses and never, EVER risk more than you can afford to loose. Let’s see how the next 24 hours unfold.

BIAS:
Short Term: Slightly Bullish
Longterm: Very Bullish

I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Thanks for stopping by.

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FYI…I just started a Facebook and twitter page where I’ll post analysis, along with other relevant crypto data from myself and others. If you’d like to be notified as soon as updates reach Steemit, the twitter handle is @Workin2005 and the Facebook page is https://www.facebook.com/Workin2005/

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by Workin2005

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