Bitcoin Mixed Signals: Hidden Bearish Divergences
On the hourly analog Bitcoin Bitfinex chart, we are looking a nice dip and rally over the past 24 hours. While the dip appears to be related to one of the ETF proposals being rejected by the SEC, it also is linked to some usual shorting speculation around the Bitcoin Futures expiration today as well.
Since the expiration, price has rallied from $7,840 to a high of $8,291 over just a few hours. The $8,250 to $8,300 level has remained a significant resistance point by the bears, which I have indicated between the two black parallel lines.
Price is now getting pinched here between that resistance level and the outside of the up-trending pitchfork on that red channel. The bulls are really knocking on the door for higher prices, but the bears seem pretty entrenched here too. Also, if you take away the ETF news, and futures pricing action, that Bart Simpson pattern over the past 24 hours with the dip and subsequent spike would probably leave price at a similar consolidation level.
If you take the low from July 12th and apply a Fibonacci Retracement to the high on July 24th, price has only dipped back down to about the red .236 Fib level at $7,933 that’s not very far for a potential wave 3 Impulse.
I still believe the most likely target is down there, around the $7,500 level where the other black horizontal line and red down-trending line are converging. I’ve adjusted that red down-trending line slightly to try and more accurately account for the changes in time frames.
The yellowish .382 Fib level at $7,579 could be good for a bounce as well and the red median line of the pitchfork could also provide support. If price does move to the upside, a run towards that blue logarithmic downtrend line and the green target at $8,486 might be close, but a correction is still needed.
The RSI is still a bit overbought at 62.58 and I am seeing some hidden bearish divergence between the neck levels of that Bart Simpson pattern, highlighted with an orange line.
The MACD histogram is beginning to turn over and that blue trigger line breaking back below the zero bound could also give some momentum back to the bears. The OBV has shown some good strength the past few days, but appears a bit weaker on the pump over the past few hours.
On the daily analog Bitcoin Bitfinex chart, there is a bullish engulfing candle that is forming currently, however today is not over yet. If the $8,170 level can be held for the bulls it could possibly give some strong momentum for a push higher.
There could be a situation where the bulls push higher for the remainder of today to only stall at the blue logarithmic downtrend line again around $8,500 and some bearish divergence is then painted on the RSI.
I have also drawn a long orange line between the peaks on the RSI indicator and you can see there is some definitive strong hidden bearish divergence with the price lower highs and the indicator higher highs. The other indicators are not showing this divergence yet, but I find the RSI works best.
I have also placed a down-trending pitchfork from the pivot swing high of Feb 20th to the swing low of Apr 1st and back to the swing high May 5th to see if price has broken the last downtrend. Sure enough it has, and the interesting thing is the outside of this big down-trending pitchfork converges with with the targets around the $7,500. This pitchfork contained price nicely in the blue channel all throughout May and June as well.
It is nice to see volume picking up significantly over the last week or so, and will be important to continue if the bulls hope to turn the tide. If a retest of that $7,500 can happen, I think we could see another rally back up to $9,800 at least. I be working on another project next week, but will try to get a post up.
-More on Vanddar.com
Since the expiration, price has rallied from $7,840 to a high of $8,291 over just a few hours. The $8,250 to $8,300 level has remained a significant resistance point by the bears, which I have indicated between the two black parallel lines.
Price is now getting pinched here between that resistance level and the outside of the up-trending pitchfork on that red channel. The bulls are really knocking on the door for higher prices, but the bears seem pretty entrenched here too. Also, if you take away the ETF news, and futures pricing action, that Bart Simpson pattern over the past 24 hours with the dip and subsequent spike would probably leave price at a similar consolidation level.
If you take the low from July 12th and apply a Fibonacci Retracement to the high on July 24th, price has only dipped back down to about the red .236 Fib level at $7,933 that’s not very far for a potential wave 3 Impulse.
I still believe the most likely target is down there, around the $7,500 level where the other black horizontal line and red down-trending line are converging. I’ve adjusted that red down-trending line slightly to try and more accurately account for the changes in time frames.
The yellowish .382 Fib level at $7,579 could be good for a bounce as well and the red median line of the pitchfork could also provide support. If price does move to the upside, a run towards that blue logarithmic downtrend line and the green target at $8,486 might be close, but a correction is still needed.
The RSI is still a bit overbought at 62.58 and I am seeing some hidden bearish divergence between the neck levels of that Bart Simpson pattern, highlighted with an orange line.
The MACD histogram is beginning to turn over and that blue trigger line breaking back below the zero bound could also give some momentum back to the bears. The OBV has shown some good strength the past few days, but appears a bit weaker on the pump over the past few hours.
On the daily analog Bitcoin Bitfinex chart, there is a bullish engulfing candle that is forming currently, however today is not over yet. If the $8,170 level can be held for the bulls it could possibly give some strong momentum for a push higher.
There could be a situation where the bulls push higher for the remainder of today to only stall at the blue logarithmic downtrend line again around $8,500 and some bearish divergence is then painted on the RSI.
I have also drawn a long orange line between the peaks on the RSI indicator and you can see there is some definitive strong hidden bearish divergence with the price lower highs and the indicator higher highs. The other indicators are not showing this divergence yet, but I find the RSI works best.
I have also placed a down-trending pitchfork from the pivot swing high of Feb 20th to the swing low of Apr 1st and back to the swing high May 5th to see if price has broken the last downtrend. Sure enough it has, and the interesting thing is the outside of this big down-trending pitchfork converges with with the targets around the $7,500. This pitchfork contained price nicely in the blue channel all throughout May and June as well.
It is nice to see volume picking up significantly over the last week or so, and will be important to continue if the bulls hope to turn the tide. If a retest of that $7,500 can happen, I think we could see another rally back up to $9,800 at least. I be working on another project next week, but will try to get a post up.
-More on Vanddar.com
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