Change of plans: SMA200 weekly holding with bullish divergence!
Bitcoin dropped from that triangle, however, we found support on the weekly SMA200 and I don't believe we're ready for that drop below $2900 just yet. If we do drop lower, we should find major horizontal support at around $2960.
Selling volume is slowly drying up and I have to admit, it seems we actually have regular bullish divergence on the weekly MFI and not hidden bearish divergence (apologies for the error, I picked it up while checking everything this morning).
We now have bullish divergence on the weekly, daily and 3H MFI so I think we could potentially rebound from here with a 38.2 fib retracement to the 18 Nov swing high. This would coincide with horizontal resistance, as well as quite a significant trendline which has acted as strong support and resistance since August 2016, most recently holding as resistance at the start of December when we crashed from the $4115 high.
A drop from our 38.2 fib retracement should then take us below our weekly SMA200 to our 138.2 fib extension at around $2210.
If we do manage to reach our $4700 resistance, then we can potentially reach the 161.8 fib extension at around $1637 after the move up, however I think this would be the less likely scenario unless we break through that $4100 resistance with volume when we have the prior move up before reaching those lower levels.
Good luck and happy trading!
Previous chart:
Selling volume is slowly drying up and I have to admit, it seems we actually have regular bullish divergence on the weekly MFI and not hidden bearish divergence (apologies for the error, I picked it up while checking everything this morning).
We now have bullish divergence on the weekly, daily and 3H MFI so I think we could potentially rebound from here with a 38.2 fib retracement to the 18 Nov swing high. This would coincide with horizontal resistance, as well as quite a significant trendline which has acted as strong support and resistance since August 2016, most recently holding as resistance at the start of December when we crashed from the $4115 high.
A drop from our 38.2 fib retracement should then take us below our weekly SMA200 to our 138.2 fib extension at around $2210.
If we do manage to reach our $4700 resistance, then we can potentially reach the 161.8 fib extension at around $1637 after the move up, however I think this would be the less likely scenario unless we break through that $4100 resistance with volume when we have the prior move up before reaching those lower levels.
Good luck and happy trading!
Previous chart:
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