Bitcoin: Bullish Divergence Analysis 1D (Jun. 16)

X Force Global Analysis:


Bitcoin has corrected down from 9.7k levels, only to test 9k and bounce right back up. In this analysis, we explore the bullish technicals demonstrated on Bitcoin's daily chart.

Analysis

- In the previous bullish divergence we have spotted (marked in green), we saw the formation of higher lows on the price, and lower lows on the indicator
- This hidden bullish divergence could be spotted with all indicators: Stochastic Oscillator, Relative Strength Index (RSI), and Moving Average Convergence Divergence (MACD)
- We have currently spotted another hidden bullish divergence, with the formation of higher lows on the price, and lower lows on the oscillators
- The previous bullish divergence led to a 20%+ move up. In this divergence, should we see a 20%+ move up, we would break and close above the 10.5k resistance, indicating the start of a potential bullish rally
- Should the daily candle close at current price levels, we could see a bullish dragonfly candle pattern, in which the lower tail is excessively longer than the body of the candle, indicating strong demand
- We are, however, currently trading below the 20 Simple Moving Average (SMA)
- While we have managed to bounce above the 0.618 Fibonacci retracement support, there is still strong resistance at 0.382 and 0.236, each at 9.5k and 9.8k levels
- The Stochastic Oscillator is forming a golden cross, but the RSI remains at neutral levels with the MACD showing increasing bearish histograms


Market Sentiment:

Long short ratios still remain dominantly bullish at 69 to 31.

What We Believe

When volatility kicks in during a choppy range, it's important to clearly identify the support and resistance zones. Strong resistance zones currently remain at 9.5, 9.8, 10, 10.5k. Strong support zones remain at 9, 8.8, and 8.6k. Always make sure to enter a position based on confirmations provided by breaches of support and resistance zones.

Trade Safe.