Bitcoin: The Key Resistance for Buyers
Bitcoin / U.S. dollar BITSTAMP:BTCUSD
The market moved upward after the reversal chart pattern, and we need to talk about the important levels and signals.
We have to focus on a resistance zone , which is formed by the main trend line of the descending price channel and 8000.00 round number level. The price action in this zone will be very important for us. If the price bounces, we should be ready to see a falling to the previous support at 7380.00 level. The breakout below this support will open a road to 6500.00, and probably the market will have a new attempt to reach 6000.00 support.
If the price breaks the downtrend line and moves above 8000.00, it will confirm the strength of buyers, and we will get a trend reversal signal. The breakout can be used for buying with stops below the local swing low and the profit targets at 9000.00 and 10 000.00 resistance levels.
Signals from Indicators
– RSI did not reach the overbought zone, and it means the market has the room for the upward movement
– MACD histogram gives a bearish signal and confirms a possible downward movement
– MACD lines are going to provide another bearish signal
– DMI is bullish , but we don’t have the confirmation of the strength of buyers and sellers. It means that the market can continue the sideways movement. The breakout above 8000.00 can be fake because of it, and the same goes for a possible breakout below 7380.00 support.
Now the market does not provide good trading opportunities. It is better to stay away and wait for additional signals, which will show further direction and how to catch a movement.
Source: TW DLavrov