Whenever, the price goes up or down too fast, the price almost always retraces. Bitcoin
has gone down 20% over the last two days, and is looking to make a short term bounce. A quick glance at the RSI
and we see that it has broken the former trend line
, which now is the support line. The RSI
is no longer in a downtrend, but starting a uptrend. There also a cross over on the MACD
, indicating the bears are losing momentum and can't drive the prices lower.
At the bottom, we see a long doji
candle. These type of candles are often a powerful reversal signal. In addition, Bitcoin
failed to made a higher low, which could mean that the downtrend is over.
Possible Trade Setup:
Stop Loss: 13700 (Slightly lower than the current low)
Target: 15740 (upper trend line
in descending triangle
What is a cross over?
What is a doji