Hi friends hope you are well and welcome to the new update on Bitcoin. Previously we have seen that the price action of leading cryptocurrency took bullish divergence from the potential reversal zone of the bullish Shark pattern. Now it has completed the final leg of the bullish Cypher. The price action has just hit the spike in the potential reversal zone however, I am expecting soon it will be completely entered again in this PRZ level.
The pattern is changed from channel to wedge:
Previously the price action was moving in a channel.
But after taking bounce from the support on the 15th of June the priceline is not able to reach at the resistance. Therefore now the pattern is changed from channel to wedge.
Support and resistance levels:
At this time the price action is moving below the resistance level of $9,500. If it will be moved more down then we have the next support at $8800. In case the $8800 will be broken down then the next support would be added $8,200. And if the price action will be moved more down then the next support would be at $7500. But if the price action will breakout the $9,500 resistance level then we have very strong resistance at $10,000. At this time we can expect that if the price action will take the bullish divergence from the potential reversal zone of Cypher pattern that we have discussed earlier then it may breakout the $9,500 resistance level.
The pricline is having good supports of SMAs:
If we watch the simple moving averages with the time period of 25, 50, 100, and 200. Then price action is moving at 25 simple moving average support and having a resistance of 50 simple moving average. If this support will be broken down then it can move more down up to 100 and 200 simple moving averages. However, these 100 and 200 SMAs are really very strong supports for the price action of BTC if priceline will be moved on these supports then it can be bounced from there.
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Conclusion:
Even though the price action of Bitcoin has formed a bullish reversal Cypher pattern but there are chances that it will move more down to enter the potential reversal zone of this pattern once more. But after that, there will be a strong possibility that the price action will move up to breakout the next resistance level. However, the potential reversal zone of Cypher can be used as a stop loss. Because if this PRZ level will be broken down then the pattern can be changed from Cypher to Shark and the leg can be more longer to the downside.
Note: This idea is education purpose only and not intended to be investment advice, please seek a duly licensed professional and do you own research before any investment.
