Topic: BTC in depth analysis May 28 (Read 122 times)

Bears attempting to bring price lower on low volume as a bullish divergence builds above support.

Resistances & Supports.
Resistances
Now that price has fallen below the intermediate level at $7.5-7.4k, this will act as resistance on the way back up.

Above $7.5k we will begin to set our sights on the higher levels such as $7.9-7.7k.

Supports
At the moment we are coming down to a very important support zone from $7.2-6.9k. This is an important level to hold due to it being an important fib level and the diagonal trendline support for the symmetrical triangle pattern in play.

Classical Chart Patterns
The larger time frame symmetrical triangle is still holding up as price nears the supporting trendline. Should price break and close on the daily below $6.8k this pattern will be resolved to the downside and the measure rule sets us well beneath the current bottom at $6k.

Moving Averages
The weekly 50 MA is currently being breached as we go into the weekly close, 6 hours from now. We saw a similar setup in 2014 with a break above the trend line resistance (bull trap) and then back beneath the 50 MA on the weekly to continue to the bear market. A break of the 50 MA today would be another additional sign that the market plays out similarly to what we saw in 2014.

Ichimoku Cloud
The 4H cloud is showing continued distance between the tenkan (blue line) and kijun (red line), showing that the down move is execessive and more drawn out than the movement over the longer time frame. This is likely unsustainable, at least without a bounce.

Oscillators
The 4H RSI is building a bullish divergence right above support, which is quite a strong signal, not as strong as the daily RSI, but still one worth mentioning and watching. This shows that there is underlying strength building even as price moves lower, which likely will resolve in a bounce as bulls regain back control.

 
Conclusion
Important time for Bitcoin at the moment as it hovers above historic lows. A break below the $6k lows will likely indicate a larger bear market, which to us here at Boomerang Capital see as an ever larger opportunity to average into better entries for the next impending bull market.

We are, however, at a very strong support with some bullish divergence already beginning to show. Many investors and traders in the space are exhibiting fearful and bearish sentiment.

The market has a way of making the many look foolish. Due to this it is important to keep a level head and focus on the charts, level by level, before making any drastic conclusions. For now, that level is $6.8k


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