Bitcoin Struggling at Resistance

Bitcoin has encountered fierce resistance at the 4^th arc for the past 2 days.  (A reminder that my charts are taken off the Kraken exchange.  Other exchanges have charts that are a bit different.)

Let’s start with a look at the daily chart:

Since the last time I wrote, price was able to overcome the 1^st arc of the pair.  It was then stopped by the 2^nd of the pair, rather mercilessly.  I remained a bit optimistic about the immediate future, until I saw that price closed below the arc pair a few hours ago.  This is hardly bullish and suggests that prices will likely be flat to lower for the immediate future.

The 8-hour chart yields a similar picture, with a bit more detail:

There is a tiny bit of good news for bulls on this chart however.  At the swing high, price closed ever-so-slightly above the 2^nd arc of the pair.  This suggests that the 2^nd arc is vulnerable.  However, there is no guarantee that it will surrender anytime soon.

Finally, let’s look at a 2 hour chart for more detail still:

Here, as you can see, the 4^th arc has been insurmountable ever since it was encountered by pricetime 2 days ago. I am a bit concerned by the fact that price (briefly punctured the 1×1 angle (blue line) recently. If we see a close below that angle, this will be quite bearish.

To get a look at the bearish argument, let’s look at a bear setup on the 2hr chart:

Here we see that the low of the last candle just passed the 1^st arc and the 2×1 angle, and found support there – at least temporarily.

This is not, imho, a time to open any new positions, either long or short.  If one is already holding a position either way, it might sense to keep it open just a bit longer to see which happens first – a close below the 1^st arc (quite bearish) or a close above the 1×1 angle (bullish).

Happy trading!

Remember:  The author is a trader who is subject to all manner of error in judgement.  Do your own research, and be prepared to take full responsibility for your own trades.

Image from Shutterstock.

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