Good morning traders. Good ol' volatility showing up some more yesterday has returned price to the $7400/$7500 level, depending on which exchange you are looking at. Today, I am looking at Coinbase. The big points to remember are that there are multiple patterns we could be seeing playing out on the larger TFs, which I have discussed over the past week. These include the double top (for all you bearish traders out there) which will not be confirmed until price closes below the swing low between the two peaks, ascending triangle, pennant, flag, and now this descending wedge. The reality of what's going on is that price has continued to remain above the EQ of this very large trading range, so while most retail traders are freaking out and shorting because they are sure that price is headed below $6000, I am taking a much more measured approach to price action at this time.
The big tell for me, at the moment, is that the daily Stoch RSI is oversold. While it can remain oversold or overbought for extended periods, the few times it has happened in the past while daily RSI was overbought or just leaving overbought, price has continued up. The 4H Stoch RSI is also oversold. It is only these smaller TFs that are showing Stoch RSI at overbought. Price is currently attempting to exit the red descending wedge's resistance as shown with a target of $7870 based on the height of that wedge. This is within the larger black descending wedge which has a likely target of around $8600, based on the height of the wedge, depending on when price breaks through its resistance.
What I don't like about the current situation is that price has dropped through the pivot. Because of the sideways action, we may be able to assume that price is just consolidating around that pivot, but we need to see it push above the pivot resistance. Rejection at the pivot would likely indicate further downside. However, as mentioned above, the large patterns that may be printing make is most probable that price would not fall to $6000 or lower at this time. The red descending channel which is holding the large descending wedge shows price back above its EQ, which is bullish and should have traders expecting a return trip to the top of the channel. Before price can do that, it must get above the 21 EMA which is currently holding it in check. As you can see, from the 1H to the daily TF, we really have no definitive direction. It is supply and demand fighting it out. This is why I have continued to caution traders against trading in this range. Support levels to watch on Coinbase are the large TR EQ at $7425, red descending channel support, S1 pivot at $7070, and large TR support at $6600.
The CME Bitcoin Futures chart looks the most bullish as price pushed up through the 4H pivot, was rejected at the R1 pivot, and is now just retracing above the pivot. As far as the daily chart is concerned, price is bouncing off the R3 pivot after being rejected at the R4 pivot. Again, this is bullish. While futures volume has fallen off from its ATH on May 13th, today's volume is already almost equivalent to yesterday's and is showing demand in control first thing this morning. Follow through for the rest of the day could be quite bullish for the weekend. However, supply is showing heavy in the orderbooks around $7800, so traders beware. If price can get above $8000, the HVN should provide support once more.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
The big tell for me, at the moment, is that the daily Stoch RSI is oversold. While it can remain oversold or overbought for extended periods, the few times it has happened in the past while daily RSI was overbought or just leaving overbought, price has continued up. The 4H Stoch RSI is also oversold. It is only these smaller TFs that are showing Stoch RSI at overbought. Price is currently attempting to exit the red descending wedge's resistance as shown with a target of $7870 based on the height of that wedge. This is within the larger black descending wedge which has a likely target of around $8600, based on the height of the wedge, depending on when price breaks through its resistance.
What I don't like about the current situation is that price has dropped through the pivot. Because of the sideways action, we may be able to assume that price is just consolidating around that pivot, but we need to see it push above the pivot resistance. Rejection at the pivot would likely indicate further downside. However, as mentioned above, the large patterns that may be printing make is most probable that price would not fall to $6000 or lower at this time. The red descending channel which is holding the large descending wedge shows price back above its EQ, which is bullish and should have traders expecting a return trip to the top of the channel. Before price can do that, it must get above the 21 EMA which is currently holding it in check. As you can see, from the 1H to the daily TF, we really have no definitive direction. It is supply and demand fighting it out. This is why I have continued to caution traders against trading in this range. Support levels to watch on Coinbase are the large TR EQ at $7425, red descending channel support, S1 pivot at $7070, and large TR support at $6600.
The CME Bitcoin Futures chart looks the most bullish as price pushed up through the 4H pivot, was rejected at the R1 pivot, and is now just retracing above the pivot. As far as the daily chart is concerned, price is bouncing off the R3 pivot after being rejected at the R4 pivot. Again, this is bullish. While futures volume has fallen off from its ATH on May 13th, today's volume is already almost equivalent to yesterday's and is showing demand in control first thing this morning. Follow through for the rest of the day could be quite bullish for the weekend. However, supply is showing heavy in the orderbooks around $7800, so traders beware. If price can get above $8000, the HVN should provide support once more.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
