Bitcoin continues to test the bounds of the 6600 level as downside momentum maintains course in overnight (US CST) trading. After the rejection of the 6800 resistance level, price action has retraced about 1/2 of the previous leg up so far.
This is shown by the current test of 6600, which is not true support but has provided a consistent pivot area for BTC throughout the bear market. The next true support level down is at 6400.
The long-term bearish upper trend line currently stands at 6630 – a good sign for bulls as that line keeps getting further away. The challenge has been for BTC to break that line and hold it, and at the moment, BTC is still a ways away for 6400 alone.
Therefore, there is a higher statistical probability for the uptrend to continue. However, keep in mind that extreme stochastic levels have historically brought the biggest price moves. Unfortunately, stochastic levels are in the oversold (<20) region and MACD remains negative on the mid-scale.
The good news is that the hourly chart has also been oversold for some time now and looks to seek higher levels – giving small entry opportunities.
MED risk entry is available for short-term plays on BTC at this time, while longer-term investors should wait for confirmation of bottoming and continuation of the uptrend.
Futures Traders – trade the trend. The short-term trend (15 min scale only) is currently short.