Bitcoin price skyrocketed earlier today to print a high of around $370. Just like we predicted along yesterday’s analysis, bitcoin price soared right after bypassing the resistance level at $330.1. The price surged to breach the resistance at $350, before dropping below it as bitcoin is now trading at $347.
New Uptrend On The 1 Hour Charts:
Let’s examine the 1 hour (BTC/USD) charts from Bitstamp (look at the below chart). We will keep the Fibonacci retracements we plotted during yesterday’s analysis and execute the stochastic oscillator. We can note the following:
- After the Elliot bearish supercycle was completed, bitcoin price started to rise, bypassing the resistance at the 50% Fibonacci retracement level. A few hours later, the price surged to breach the resistance at $350 and continued rising to a high of $370, yet the market’s buying power wasn’t strong enough to support the price at that level, which led to price drop below that crucial resistance level.
- We can now spot a new upwards sloping trend line forming since yesterday’s price surge. As shown by the blue trend line on the below chart, a bullish wave (green arrow) was followed by a bearish correction wave (red arrow) and we can expect price to rise again during the next few hours to test the resistance at $350.
- If bitcoin price settles above $350 within the next few hours, we can see it rise to test the resistance at $370 within the next 24-48 hours.
- The stochastic oscillator value has dropped to 46 as compared to yesterday’s value of 94, so investing in long positions now can have a convenient risk/reward ratio with take profit set at $350 and $370, with a stop loss of $330.
Is This a Rubber Band Effect?
The “Rubber band effect” is a Wall Street term that refers to bouncing of the price of a stock after a large market sell-off, so is this price surge a “rubber band effect”? I would love to know your thoughts on this.
Conclusion:
Bitcoin price soared earlier today to print a high of $370; however, the bulls didn’t manage to keep the price above the $350 level. The stochastic indicator is at a value that is in favor of a further rise that can take bitcoin price to test the resistance at $370 within the next 24-48 hours.
Charts from Bitstamp, hosted on Tradingview.com