The price of Bitcoin has increased almost 50% in the last week. The price has simply gone up too much too quickly and is due for a short correction before continuing. The RSI is overbrought (I made a typo in the chart; it's overbrought, not oversold), and the MACD is showing bearish divergence. The histogram is declining while the prices are increasing. That means the bulls are losing momentum despite increasing prices. Furthermore, Bitcoin has formed a parallel channel and 3 peaks within it. Usually the price action either breaks below the channel above or breaks above the channel after 3 peaks. Very rarely does it continue to stay within the channel. The indicators show that Bitcoin is unlikely to break above the channel, so the price will likely choose the other option and drop. More over, Bitcoin has formed a rising wedge, which is a common reversal pattern after a strong bull run. In addition, Bitcoin already has 5 impulse waves, and according to Elliot Wave theory, Bitcoin will likely retrace to the 0.382 Fibonacci level (or more) before continuing the uptrend.
If you decide to short Bitcoin, I would recommend to take profit at 0.382 retracement level at 15060 and stop loss slightly above the relative peak. If you are planning to buy Bitcoin, I would advise to wait until at least the 0.382 level, but do know that Bitcoin MAY go even lower, possibly to 13700.
If you decide to short Bitcoin, I would recommend to take profit at 0.382 retracement level at 15060 and stop loss slightly above the relative peak. If you are planning to buy Bitcoin, I would advise to wait until at least the 0.382 level, but do know that Bitcoin MAY go even lower, possibly to 13700.
