Now that the Bitcoin Cash hard fork is complete, will Bitcoin bounce back from a $1,200 loss?
Yesterday’s 8% move from $5,188 to $5,700 was nice but does the King of Cryptocurrencies have any other cards up its sleeve? At the moment bull volume is nearly non-existent and as the weekend approaches it could taper even further so barring some positive breaking news, bitcoin (BTC) [coin_price] seems set to trade in the current range at least until the start of next week
Bitcoin does not appear to have found a bottom yet and at the moment there is an inside bar forming on the daily chart. Depending on one’s vision, there is the possibility of an inverse head and shoulders formation in the works on the 4-hour chart. Bitcoin needs to break above the closest resistance at $5,712 then $5,760 in order to trade above the 5 and 10-MA. There was a soft support at 5,590 but this appeared to be giving way at the time of publishing.
Looking Forward Over the Short Term
In the event of an inverse head and shoulders pattern becoming clearer, cautious traders might wait before popping in for a presumed bull break as the 4-hr resistances have not been tested since the big drop. So waiting to observe sustained follow-through above the most immediate resistances might be wise. There also appears to be divergence within the Stoch and RSI when compared to Bitcoin price action [coin_price] on the 4-hour chart but the absence of bull volume means traders shouldn’t get too excited.
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Images courtesy of Shutterstock, Trading View. Market data sourced from Bitfinex.