Hi Traders! Bitcoin forecast follow up and update is here. On May 4th I shared this “Bitcoin Forecast And Technical Analysis” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H1 chart we have a bearish divergence that has formed between the first high that has formed at 58260 and the second high that has formed at 58551 based on the MACD indicator. The price then moved lower and broke below the last low at 55988 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider this as evidence of bearish pressure. As per the book scenario after a bearish convergence we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. Also we have a strong resistance zone that has formed and the price which was moving higher respected this zone and is holding below it. Until this strong resistance zone holds my view remains bearish here and I expect the price to move lower further.
Bitcoin H1(1 Hour) Chart Current Scenario
On the H1 chart my view was bearish and I was expecting the price to move lower further until the strong resistance zone holds. The price action followed my analysis exactly as I expected it to here. After the bearish convergence, we had a pullback, and then the price moved lower as I expected it to and delivered a nice move to the downside until it was blocked by a bullish divergence.
On the M15 chart the price provided us with facts supporting the bearish view. After the bearish convergence, the H1 chart correction happened in the form of a range on the M15 chart. The price which was moving inside this range broke below the bottom of it, which we may consider as evidence of bearish pressure. We then had a pullback but the price was holding below the top of this range and then it moved lower further and provided a nice move to the downside as you can see in the image below.
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bearish view here and there were no signs against it. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at majority of the times and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions.
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To your success,
Vladimir Ribakov
Certified Financial Technician
