Bitcoin spiked in potential reversal zone of bearish BATHey friends, hope you are well and welcome to new update on Bitcoin.
Bearish harmonic Butterfly move:
Three weeks ago, I told you that bitcoin is completing the final leg of bearish Butterfly pattern on the long-term monthly chart. Now finally the price action has rallied upto $24211 and completed this leg. Now there are chances of price reversal because the price action already has spiked in the potential reversal zone of this bit bearish Butterfly pattern.
Previous bullish harmonic Gartley move:
This is quite a similar move that Bitcoin completed in April 2020, but that was bullish Gartley. At that time when the final leg was completed, then I posted an article and video where I said that the price action has entered in potential reversal zone and it can be reversed from here. Eventually, the priceline reversed, and sofar it has rallied more than 255%.
The exponential moving averages:
On the long-term weekly chart, the price action of the leading cryptocurrency is at the high distance from the exponential moving averages with the time period of 10 and 21, therefore, if the correction rally will be started then we can expect a move upto exponential moving average 21 that is at $15250 at the time of writing.
Bearish divergence on the daily chart:
If we switch to the daily time period chart, then it can be observed that the price action is forming higher highs, but the RSI is moving in opposite direction sliding down and stochastic is in a sideways trend. But if we switch to the smaller time period charts like in hourly, 4 hourly and 12 hourly, then the RSI stochastic and price action of Bitcoin altogether are in uptrend. So, on the daily chart, we have received a weak signal for bearish divergence, but once this bearish divergence signal will be reflected on the smaller time period charts as well, then we can be confirmed that a down trend can be started.
Fractal resistance and supports:
If we place the zigzag indicator on the daily time frame chart, then it can be clearly observed that from 2nd Oct to 26 Nov, the Zigzag indicator was ignoring all up and down moves and not showing any pattern, this shows the power of bulls. Now finally, after 1st Dec the Zigzag is showing the correction move. It can be an indication that now soon we will have a sideways move or a start of down trend. Here we can also watch the fractals, like previously from 26 Nov to 11 Dec we had bearish reversal fractal resistance at $19900 and the price action broke out that resistance and started the next rally. Now if the price action will form bearish and bullish reversal fractals then we should observe, whether the price action breaks the resistance or support, if the support will be broken down then a rally to the down side can be confirmed.
Conclusion :
At the moment the bulls are in power and we have received very weak bearish signals. But the price action has also entered in potential reversal zone of Butterfly pattern, therefore a bearish reversal from here is very much possible.
