Do Fractals Repeat? Weekly Preview | Bitstamp - BTC/USD - 1HR
Price on Bitstamp above both the Middle 100BB & 200BB support | 1hr time interval
Since a small correction on the 16th of October, price has been supported my both the Middle 100MA and 200MA Bollinger Bands.
After a short breakout rally on the 18th of October, price has been compressed between the $385-$392 area.
For this weekly preview, two fractals have been identified, that show similarities and may hint how price action may play out.
Fractal A [290914-031014] : Approximately 83 Bars/Candles before a significant price movement.
1. RSI failed nearly 13hrs before the 5MA confirmed a bearish cross on the 20MA. Since then it continued declining sharply along with price.
2. MACD confirmed a bearish signal roughly 2hrs before price started declining and entered negative momentum territory.
3. Both the 200MA Upper and Lower Bollinger Bands started compressing, with the 200MA (Middle BB) acting as strong resistance (Pink line).
4. Both the 100MA Upper and Lower Bollinger Bands started compressing, with the 100MA (Middle BB) acting as strong resistance (White line).
5. The 20MA acted as short term resistance and guided prices lower (Yellow line).
Fractal B [161014-Today] : Approximately 77 Bars/Candles. Waiting for any significant price movement.
1. RSI has failed twice on the 69 level, almost 13hrs before the 5MA confirmed a bearish cross on the 20MA. Since then it has not reversed and price has shown no signs of clear direction.
2. MACD confirmed a bearish signal 2hrs before price started compressing. It has not yet entered the negative momentum territory.
3. Both the 200MA Upper and Lower Bollinger Bands have compressed, with the 200MA (Middle BB) acting as strong support (Pink line).
4. Both the 100MA Upper and Lower Bollinger Bands have compressed, with the 100MA (Middle BB) acting as strong support (White line).
5. Since the 5MA bearish cross on the 20MA, the latter has been acting as short term resistance (Yellow line).
On the long side: At the time of writing, a significant difference has been identified between the two fractals. That is the support offered by both the Middle 100MA and 200MA BBs. This support has been tested and proven strong. Hence, as long as both hold, the bullish case will remain healthy. A strong break above the Upper 100MA BB at $398 will increase the odds of propelling price up to $410 and possibly further.
On the short side: There has to be a combination of weaknesses across the board in order for any meaningful decline to begin. First, MACD must enter the negative momentum territory. Moreover, the 20MA shall continue to act as resistance. Furthermore, price must breach both the Middle 100MA and 200MA BBs to the downside. Both aforementioned BBs are very close to each other at $385, hence, this point is the one that has to be initially broken. A strong break below this point will probably lead price to test support at the Lower 100MA BB at $373. If the latter is broken too then odds will increase significantly to test the Lower 200MA BB support at $354.
Overall: Price has been consolidating. Bollinger bands are compressing. Support must stay intact.
Outcome Probabilities:
Long: On a strong break above $398 – Price Target $410+ | Probability: 35%
Neutral: Price Range $385-$392 | Probability: 40%
Short: On a strong break below $384 – Price Target $354 | Probability: 25%
Our Stance: Still conservative towards long exposure.
Since a small correction on the 16th of October, price has been supported my both the Middle 100MA and 200MA Bollinger Bands.
After a short breakout rally on the 18th of October, price has been compressed between the $385-$392 area.
For this weekly preview, two fractals have been identified, that show similarities and may hint how price action may play out.
Fractal A [290914-031014] : Approximately 83 Bars/Candles before a significant price movement.
1. RSI failed nearly 13hrs before the 5MA confirmed a bearish cross on the 20MA. Since then it continued declining sharply along with price.
2. MACD confirmed a bearish signal roughly 2hrs before price started declining and entered negative momentum territory.
3. Both the 200MA Upper and Lower Bollinger Bands started compressing, with the 200MA (Middle BB) acting as strong resistance (Pink line).
4. Both the 100MA Upper and Lower Bollinger Bands started compressing, with the 100MA (Middle BB) acting as strong resistance (White line).
5. The 20MA acted as short term resistance and guided prices lower (Yellow line).
Fractal B [161014-Today] : Approximately 77 Bars/Candles. Waiting for any significant price movement.
1. RSI has failed twice on the 69 level, almost 13hrs before the 5MA confirmed a bearish cross on the 20MA. Since then it has not reversed and price has shown no signs of clear direction.
2. MACD confirmed a bearish signal 2hrs before price started compressing. It has not yet entered the negative momentum territory.
3. Both the 200MA Upper and Lower Bollinger Bands have compressed, with the 200MA (Middle BB) acting as strong support (Pink line).
4. Both the 100MA Upper and Lower Bollinger Bands have compressed, with the 100MA (Middle BB) acting as strong support (White line).
5. Since the 5MA bearish cross on the 20MA, the latter has been acting as short term resistance (Yellow line).
On the long side: At the time of writing, a significant difference has been identified between the two fractals. That is the support offered by both the Middle 100MA and 200MA BBs. This support has been tested and proven strong. Hence, as long as both hold, the bullish case will remain healthy. A strong break above the Upper 100MA BB at $398 will increase the odds of propelling price up to $410 and possibly further.
On the short side: There has to be a combination of weaknesses across the board in order for any meaningful decline to begin. First, MACD must enter the negative momentum territory. Moreover, the 20MA shall continue to act as resistance. Furthermore, price must breach both the Middle 100MA and 200MA BBs to the downside. Both aforementioned BBs are very close to each other at $385, hence, this point is the one that has to be initially broken. A strong break below this point will probably lead price to test support at the Lower 100MA BB at $373. If the latter is broken too then odds will increase significantly to test the Lower 200MA BB support at $354.
Overall: Price has been consolidating. Bollinger bands are compressing. Support must stay intact.
Outcome Probabilities:
Long: On a strong break above $398 – Price Target $410+ | Probability: 35%
Neutral: Price Range $385-$392 | Probability: 40%
Short: On a strong break below $384 – Price Target $354 | Probability: 25%
Our Stance: Still conservative towards long exposure.
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