After yesterday’s (June 27) vicious 25% (!) selloff from the local top, Bitcoin (BTC) is today bouncing back and retesting lost support levels.
Bitcoin bounced last night (UTC) after hitting a thick knot of support located between $11,200-10,500 – not at all unusual after falling 25% in the span of a single day. A falling wedge pattern also presaged a breakout, which is currently materializing as a counter-rally.
The resistance zone around $11,600 – a very important zone for reasons described here – has at the time of writing already been retaken, and with it the important 55 hour exponential moving average (EMA). We should look for some candle closes, starting with the hourly candle, above this zone to indicate longevity above $11,600.
We must acknowledge, however, that the buy volume (Bitstamp exchange) hasn’t quite matched yesterday’s intense sell volume. We should watch the area around $12,200, where the previous uptrend line lies, to see if the counter-rally will be held here. Without more volume and some solid closes, it is nowhere guaranteed that the counter-rally will hold the leading crypto at these levels.
If we take a step back and look at the all-important daily chart, we might consider the likelihood of a successful counter-rally here small: June 27’s candle close was extremely bearish, with both a tweezers-top pair of candles, and a fully bearish engulfing candle close.
Watching today’s daily candle closes will be important. Closing above the 0.382 Fibonacci retracement mark, coming at roughly the $11,600 price, would seem to be the minimum for a show of strength. Closing above the 0.5 retracement mark at $12,000 would be much better. Closing below both of those might signal a further retracement and medium-term trend change.
Only two days remain before the even more important weekly and monthly candle closes. We will cover these important milestones going into the weekend, as they will signal long-term directions.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.
