Bitcoin and Altcoins experienced a mini bull market over the last 48 hours trading after hitting new 2018 lows. Bitcoin bounced from support around $5,800 - $6,000 level to a recent high of $8,600, which was a whopping 40%+ rally in under 2 trading days. This is remarkable and shows the high volatility in cryptos.
Altcoin Ether also experienced a similar result over the last 48 hours bouncing off the lows around $600 to rise to just over $850.
Bitcoin's Rally Capitulation Trade Forecast Hits The Mark
If you missed my recent Steemit post on Bitcoin where I accurately predicted a short term bounce was imminent, for Bitcoin & Altcoins you can check out by clicking here
In my most recent post I suggested if Bitcoin was able to close successfully above the new level of resistance than we could see a target area of $8,900 - $9,000. You can view this Steemit post by clicking here
Well the target area prediction came in close as Bitcoin made a recent high of $8,600, however it looks like its run out of steam and most likely is about to have another reversal lower.
What Is The Charts Is Telling Us About Bitcoin
From the chart below you can clearly see the upper bound area on the downtrend has recently been hit and it appears the price action is set to confirm a reversal in Bitcoin.
The momentum indicator has once again started to fall further into the red suggesting the reversal is close to a lock and heading lower. The stochastic indicator has not turned as of yet but the daily chart price action is confirmed the bearish cross will follow momentum lower.
I have once again targeted the previous support level as the first level of support around $5,800 - $6,000 (Shown with a rectangle on the price action).
Like all charting observations confirmation is required to be sure of the reversal pattern.
The four hour candle below for Bitcoin shows a similar pattern to the daily chart with mixed technical signals.
The price has also reached the upper bound of the downtrend with the price action getting stopped, as the mini uptrend has been breached as shown on the chart.
The stochastic pattern has turned to a bearish cross confirming the reversal, however the momentum indicator is still considerably high in the green although it's rapidly falling.
Due to the high volatility of Bitcoin its possible that we could see a breach of support as it forms a new support level below $5,800 - $6,000.
Ether Runs Into Resistance & Follows Bitcoin Lower
Ether just like Bitcoin experienced a mini bullish burst in price jumping over 40% in price. However in the last 12 hours of trading the price was unable to breach its first resistance level around $850. Currently its sitting just under $800 and is showing a similar reversal pattern to Bitcoin.
Both the Stochastic & Momentum indicators are confirming that the reversal is imminent as momentum falls further and the Stochastic forms another bearish cross.
The first likely target area for Ether is back to the previous support level around the $600 level.
Even though its likely the price of Bitcoin, Ether and Altcoins are heading lower in the short term, if Bitcoin is able to hold onto its previous support level this could become bullish from a medium term perspective for all coins.
This is because it would mean a triple bottom support has been established and it would of shaken out the weaker hands who have been selling.
Provided this happens we would need to see a close above the downtrend channel shown in these charts to become bullish on a medium and long term basis.
Happy trading and stay CALM.
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Disclaimer: This post is for educational purposes only, and all the information contained within this post is not to be considered as advice or a recommendation of any kind. If you require advice or assistance please seek a licensed professional who can provide these services.
Sources:
Click the links below to view my latest Steemit posts:
Bitcoins Capitulation Confirmed - Bounces Off Support As Cryptos & Stocks Rally Higher
The Markets Are In A Panic - Are We Close To A Capitulation In Stocks & Bitcoin?
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Bitcoin BTC - Is A Breakout Imminent As US Stocks Come Under Pressure?