Bitcoin's daily is looking better and better
Good morning, traders. The despair is growing as price hovers around $6400 which tells me we are near time for a reversal, if only for a few thousand dollars at this time. The daily RSI is oversold which usually indicates a reversal. BTCUSD shorts are still very high within an ascending braodening wedge, which is bearish (bearish for shorts is bullish for price). As mentioned yesterday, these events don't happen in a day -- they usually consist of a few days to complete. Remember, it's all about the big picture, and if the current price action is making you feel emotional then the reality is that you likely have too much at stake in the market. Whether price is rising or dropping should not make you emotional. If you are emotional then it's likely you are using the market as a casino rather than a business and, in return, the market will treat you as if it's a casino by taking your money. I hope you are following us on other social media as we update during the day.
This daily chart gives us the current larger picture. Drawing support and resistance off the candle bodies shows us that price is moving within a descending wedge and within a descending green channel. RSI is within a descending broadening wedge and is oversold, both signals of an impending reversal. %B has printed bullish divergence, which usually signals a reversal in price is near. Upon a bounce, we want to see a breach of the green channel's descending resistance line to indicate further bullish momentum. This would also require breaching the ascending red resistance line which marked the bottom of the triangle we had been consolidating within for the past 4 months. As I said before price ever fell below that red line, there is the possibility that we could see a throwback. This occurs when price breaks a pattern in one direction and then reverses and continues in the other direction. Because we are drawing support and resistance off the candle bodies for the descending wedge, we have to be aware that price could spike through the support before bouncing as seen in February and slightly in April. This would be a bear trap. A drop and strong rebound from where we are could see price potentially pushing through the descending wedge's resistance line and the daily cloud. This would be significant as it would be the first time price has been above the daily cloud since January. There is the potential that a reversal at this point would find resistance at one of the areas noted above and then proceed further down, but we should at least be able to see a few thousand dollars in upward movement sooner rather than later.
The question often presented is "who will buy?" One answer is that a "sell" is needed for every "buy," and as we've been mentioning shorts continue to pile up, so liquidation of the shorts would then fill the buy orders of the market makers. All that's needed is a catalyst. Watch for it in the form of a SFP (swing failure point) which will be used to engineer the liquidity needed to start squeezing shorts.
This daily chart gives us the current larger picture. Drawing support and resistance off the candle bodies shows us that price is moving within a descending wedge and within a descending green channel. RSI is within a descending broadening wedge and is oversold, both signals of an impending reversal. %B has printed bullish divergence, which usually signals a reversal in price is near. Upon a bounce, we want to see a breach of the green channel's descending resistance line to indicate further bullish momentum. This would also require breaching the ascending red resistance line which marked the bottom of the triangle we had been consolidating within for the past 4 months. As I said before price ever fell below that red line, there is the possibility that we could see a throwback. This occurs when price breaks a pattern in one direction and then reverses and continues in the other direction. Because we are drawing support and resistance off the candle bodies for the descending wedge, we have to be aware that price could spike through the support before bouncing as seen in February and slightly in April. This would be a bear trap. A drop and strong rebound from where we are could see price potentially pushing through the descending wedge's resistance line and the daily cloud. This would be significant as it would be the first time price has been above the daily cloud since January. There is the potential that a reversal at this point would find resistance at one of the areas noted above and then proceed further down, but we should at least be able to see a few thousand dollars in upward movement sooner rather than later.
The question often presented is "who will buy?" One answer is that a "sell" is needed for every "buy," and as we've been mentioning shorts continue to pile up, so liquidation of the shorts would then fill the buy orders of the market makers. All that's needed is a catalyst. Watch for it in the form of a SFP (swing failure point) which will be used to engineer the liquidity needed to start squeezing shorts.
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