In a turn of events worthy of the World Cup, bulls have managed to wrest charge of BTC from the bears over the last week, despite their precarious position.. A decent attempt at an inverse head and shoulders bottom is underway, and they’ve managed to establish a new Alamo support level at $5820.
Since the whole market is following BTCUSD around, I’m just charting that until we see a resolution to the current bottoming attempt.
The pink arrows show the inverse head and shoulders formation. The case for this is clearly made through the weakened volume and higher RSI on the right shoulder.
Inverse head and shoulders patterns can be a potent bottoming formation, but must be accompanied by a surge of volume as the price moves above the neckline (which I’ve marked in pink here). So the next few days will be telling. Our death-cross target of $4280 (marked in red) remains valid unless we see a high volume push over this pink line.
The bottom of the ‘head’ represents a new support level at $5820 to keep an eye on. If the bottoming attempt fails we’re likely to see another battle there, and only if that level fails will we see the sort of high-volume capitulation move we’ve been expecting.
Zooming in to look at the inverse h&s on a 4-hour chart, you can clearly see the bulls take charge of the volume during the ‘head’ in the middle’.
This morning’s move over the 50 and 200 moving averages (red and blue here) was on high volume and bodes well for an attempt on the pink neckline.
Watching closely! Have a good week all.
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