My first time publishing a review/idea, let's see how it works out :)
Last couple of days I've seen several times that what once was support became resistance on the hourly chart. Combine that with the momentum indicators showing a divergence for some time now, ie price making new highs, but RSI/MACD not, but instead making lower highs and lower lows.
And now there's also a Head & Shoulder pattern with the neckline around $4200 with a target of $3900.
There is a good chance that the neckline will hold as right now, there needs to be 1300 BTC sold to get to $4141, which is below the neckline but I do consider that strong support. Unlike on GDAX/Coinbase, the support (and resistance) tends to be real on Bitstamp (vs fake on GDAX). It's also not uncommon for BTC to have a fake breakout (both upwards and downwards) and the $60 gap between the neckline and major support on the books could be just that.
The longer timeframe (price) charts don't show anything to worry about yet, although the momentum indicators do show some weakness. But for the longer timeframe to get bearish , you'd first need to have the short once to turn bearish .
We also have had a HUGE bull run, more then 2x in a month!, so it would be healthy for the market to get a pullback.
The pull back could go as far as $3000 and thereby making the former resistance support, but it would make me uncomfortable if it actually went that far.
There are also some fundamental reasons which make me a bit cautious, but I won't go into that here/now.
All in all, an excellent time to take some profit and let the market figure out what it wants to do next, before going back in (fully) again.
I do expect that the uptrend will continue after that as it has broken the/my 1.618 Fibonacci line. What I often see is that when such a level is broken is that you see a pull back before going up again towards the next resistance.
Last couple of days I've seen several times that what once was support became resistance on the hourly chart. Combine that with the momentum indicators showing a divergence for some time now, ie price making new highs, but RSI/MACD not, but instead making lower highs and lower lows.
And now there's also a Head & Shoulder pattern with the neckline around $4200 with a target of $3900.
There is a good chance that the neckline will hold as right now, there needs to be 1300 BTC sold to get to $4141, which is below the neckline but I do consider that strong support. Unlike on GDAX/Coinbase, the support (and resistance) tends to be real on Bitstamp (vs fake on GDAX). It's also not uncommon for BTC to have a fake breakout (both upwards and downwards) and the $60 gap between the neckline and major support on the books could be just that.
The longer timeframe (price) charts don't show anything to worry about yet, although the momentum indicators do show some weakness. But for the longer timeframe to get bearish , you'd first need to have the short once to turn bearish .
We also have had a HUGE bull run, more then 2x in a month!, so it would be healthy for the market to get a pullback.
The pull back could go as far as $3000 and thereby making the former resistance support, but it would make me uncomfortable if it actually went that far.
There are also some fundamental reasons which make me a bit cautious, but I won't go into that here/now.
All in all, an excellent time to take some profit and let the market figure out what it wants to do next, before going back in (fully) again.
I do expect that the uptrend will continue after that as it has broken the/my 1.618 Fibonacci line. What I often see is that when such a level is broken is that you see a pull back before going up again towards the next resistance.
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I want to add the daily chart so you'll see the long term trend and my Fibonacci levels, but I don't know how to do that. If you do, please leave a comment telling me how :)
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There's a reasonable chance that the downturn, with a low of $3965, is already over. But there is currently a 600+ BTC sell wall on GDAX, non-fake this time, that needs to be eaten through, so that may be 'some' resistance ;-)
