Bitcoin – 8000.00 Resistance Again but What’s Next?
Bitcoin / Dollar BITSTAMP:BTCUSD
This is the update to my previous post which you can find in the related ideas.
The price bounced from 7000.00 support zone . After a short term sideways movement, we could see a strong bullish candle and reaching 8000.00 resistance level . If we talk about the 4H timeframe, we have a structure where the price corrects the previous upward movement and makes a new movement in the direction of the primary uptrend. This structure is good for this timeframe but if we talk about the daily, the market still needs the correction and it looks overbought. Based on it, for us, the price action at 8000.00 resistance and at the previous swing highs will be very important as it can give us ideas about further market movements.
If the price bounces from 8000.00 resistance, we will get a new swing high lower than the previous highs. It can become a strong bearish signal as probably the market will be able to form a Head & Shoulders chart pattern which belong to reversal group of patterns. The lower swing high also will be a good reason for thinking about a new bearish trend based on the 4H timeframe. With such signals, we should be ready to see another falling which also will be supported by the daily market conditions.
If the price continues the upward movement after the breaking 8000.00 resistance and will make a new swing high higher than the previous ones, it will be a bullish signal confirming the upward movement to higher resistance levels. But at the same time, we will get the market becoming more and more overbought. This situation will be similar to 2017 when the price moved only upward, and it made a bubble in the market. You all know what comes next after bubbles. If you forgot, just look at the market in 2018 year.
For a stable uptrend, the best behavior will be – logical upward movements after good corrections. It will be much better to have the uptrend which is supported by the fundamental factors. I think such a trend will be much more stable, predictable and it will allow us to avoid bubbles with further fallings.
Do you want to have a stable uptrend or a crazy and unpredictable time is more suitable for you? Share your opinion in comments. Let’s discuss!
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Also, as usual, on Monday, I will share with you much more details about crypto and other markets. Just follow the news!
Source: TW DLavrov