Bitcoin: Area of Conflict Analysis 1H (May 13)

X Force Global Analysis:


Bitcoin has been trading between an area of conflict, between 8.5k and 8.9k. In this analysis, we explore the bullish and bearish scenarios for bitcoin, based on technical evidence weighed into probabilities.


Bullish Evidence

- We have been creating higher lows on the hourly chart
- The Moving Average Convergence Divergence (MACD) has formed a golden cross on the 4H chart
- We have found strong support above the 0.382 Fibonacci support
- The pattern could be interpreted as an ascending triangle pattern, with a potential breakout in play at the apex


Bearish Evidence

- From a bearish perspective, this could be interpreted as a bearish rising wedge pattern
- We have strong resistance at the 0.236 Fibonacci resistance, and historical resistance at $9,160
- We are yet to break out of the descending trend line resistance
- While there are evidence to support a bullish breakout for the immediate term, there is still more downside for a bigger correction on the daily and weekly charts


Market Sentiment:

The long short ratio remains at 64 to 36, with still more long positions than shorts, and dominant bullish sentiment.


What We Believe

We believe that while a short term breakout may be probable, further downside is highly likely to occur, according to the bigger picture. In fact, a small breakout from here - given that it doesn't lead to another bullish rally - could actually add more weight to the bearish scenario by completing a head and shoulders pattern on the longer term charts.

Trade Safe.