BTC looking for a small relief rally from a key support level
The price has been moving in a downtrend channel for a week now with no significant bounces or corrections to the upside.
There are still not many signs that indicate a larger bounce happening. No reversal chart patterns. The daily chart looks particularly bearish.
However due to the fact that this 6750-6850 area is the key support level since the move up towards 8500 started days ago, it is expected that some defending of this level should happen, resulting at least in a small relief rally to the upside.
If this level fails to hold, and especially if it fails to produce even a small bounce from these levels and just breaks down continuing the fall, then it would be safe to assume the bears have taken full control of this market once again, and we're likely to see retesting the previous bottom (and more likely) new lows down the road.
Currently, the price is trying to form a double bottom on a significant support level. Note that the context here is very important.
6800 area is a pivot point and a key support.
There is a clear bullish divergence on RSI across multiple timeframes up to 4h chart. The volume is dying off even though the price tried to make a lower low (and so far failed, which is an additional sign for a potential bounce).
If this level holds, we should see a relief rally towards 7195-7215 area as a first target.
Second (slightly more ambitious) target would be 7350, which is the beginning of (now) a strong resistance area on this timeframe.
Bear in mind, this is a counter-trend trade, therefore it carries more risk. There has been a strong drop, and all we're looking for at this point is to capitalize on a small bounce or a relief rally, because nothing goes up or down in a straight line.
It is still possible to see another attempt at breaking the support level and going slightly lower (but should not be with high volume, and ideally should not go below 6750, and even there it should only be a wick and not close a full 4h candle at that level).
However, IF the daily candle closes below 6800, then the crucial support area failed to hold, and the drop will likely continue, indicating major weakness is still present in this market.
There are still not many signs that indicate a larger bounce happening. No reversal chart patterns. The daily chart looks particularly bearish.
However due to the fact that this 6750-6850 area is the key support level since the move up towards 8500 started days ago, it is expected that some defending of this level should happen, resulting at least in a small relief rally to the upside.
If this level fails to hold, and especially if it fails to produce even a small bounce from these levels and just breaks down continuing the fall, then it would be safe to assume the bears have taken full control of this market once again, and we're likely to see retesting the previous bottom (and more likely) new lows down the road.
Currently, the price is trying to form a double bottom on a significant support level. Note that the context here is very important.
6800 area is a pivot point and a key support.
There is a clear bullish divergence on RSI across multiple timeframes up to 4h chart. The volume is dying off even though the price tried to make a lower low (and so far failed, which is an additional sign for a potential bounce).
If this level holds, we should see a relief rally towards 7195-7215 area as a first target.
Second (slightly more ambitious) target would be 7350, which is the beginning of (now) a strong resistance area on this timeframe.
Bear in mind, this is a counter-trend trade, therefore it carries more risk. There has been a strong drop, and all we're looking for at this point is to capitalize on a small bounce or a relief rally, because nothing goes up or down in a straight line.
It is still possible to see another attempt at breaking the support level and going slightly lower (but should not be with high volume, and ideally should not go below 6750, and even there it should only be a wick and not close a full 4h candle at that level).
However, IF the daily candle closes below 6800, then the crucial support area failed to hold, and the drop will likely continue, indicating major weakness is still present in this market.
Комментарий:
These kinds of drops are not something we want to see, since they are not corrective waves (corrections are more gradual, slower and more controlled drops, not sharp and large red candles like these).
In any case, the price is still within the range, and the crucial support at 6800 has to hold, otherwise, this might get ugly.
The daily candle closes in a bit more than 3 hours. Let's see if this level will manage to stay defended by then.
In any case, the price is still within the range, and the crucial support at 6800 has to hold, otherwise, this might get ugly.
The daily candle closes in a bit more than 3 hours. Let's see if this level will manage to stay defended by then.
Комментарий:
Currently we have a clear trading range formed at these levels. Still no volume behind this breakout attempt (might follow additionally). In any case, it is a good sign of strength to see this kind of price action here. Might still see a small pullback, but as long as the price stays above 6970, things are looking good.