• Bitcoin price
action gives mixed signals as bulls and bears both find opportunities.
• Ethereum price
threatens a 20% drop while simultaneously creating a bull flag.
• XRP maintains
critical support despite a powerful bearish continuation setup.
Bitcoin price is
positioned at a level where strong signals can be made for both long and short
biases. Ethereum price has a make-or-break level at $3,800. XRP finds and holds
support against two key Fibonacci levels despite bearish Ichimoku conditions.
Bitcoin price is bullish on the weekly
chart but bearish on the daily
Bitcoin price shows several mixed signals as it
approaches the end of the week. On Bitcoin’s weekly chart, fears of the
beginning of a bear market may have abated somewhat. However, bulls appear to
want to hold the 50% Fibonacci retracement ($48,000) and the weekly Kijun-Sen
($49,000) as a near-term support level. The oscillators certainly help confirm
solid support for the $48,000 - $49,000 levels.
The Relative Strength Index is currently testing the first oversold level in a bull market, 50. Most important, however, is the position of the Composite Index. When comparing the Composite Index swing low on the week of September 24th and its candlestick position to the current Composite Index swing low and its candlestick, there is a difference in structure.
The Composite Index shows lower lows while the
candlestick chart shows higher lows. This is a condition known as hidden
bullish divergence – a warning sign that the current, short-term downside
movement in Bitcoin price is likely to terminate soon and resume its uptrend.
The same hidden bullish divergence is also present in the Relative Strength
Index, albeit to a lesser degree. The confluence of hidden bullish divergence
in the oscillators while Bitcoin finds support on the candlestick chart gives
credence to a likely incoming bullish reversal.
However, some
bearish warning signs for Bitcoin price do exist. While the weekly chart is
more important and more relevant when compared to the daily chart, broad trend
changes occur on faster timeframes before they occur on more extended time
frames. The daily chart could be hinting at a shift towards a bear market.
On its daily
chart, Bitcoin is currently in an overwhelmingly bearish trading environment
within the Ichimoku Kinko Hyo system. Bitcoin price is below the Cloud (Senkou
Span A and Senkou Span B), the Kijun-Sen, and the Tenkan-Sen. Future Senkou
Span A is below Future Senkou Span B, and the Chikou Span is below the
candlesticks and in open space. Every marker for a bearish Ichimoku chart is
present.
The shaded area on the chart above is the most significant nearby threat
for Bitcoin price. There is a significant gap between two high-volume nodes in
the 2021 volume profile between $47,000 and $33,000. Bitcoin is just barely
holding onto that final support zone.
Ethereum price
faced overwhelming rejection against the top of the Cloud (Senkou Span A) and
the bottom of a prior bear flag on Thursday. As a result, Ethereum’s daily
close was just a hair below the daily Tenkan-Sen and Kijun-Sen, as well as the
dominant interior trend line (black diagonal line). Failure to hold the $4,200
level as support points to Ethereum returning to $3,800.
$3,800 is the
final major test for Ethereum. There is a trifecta of support at $3,800 with
the bottom of a bull flag, the bottom of the Cloud (Senkou Span B), and the
100% Fibonacci expansion all sharing that price level. Confirmation of Ethereum
price finding support there would likely begin the process of a bullish
breakout. Consequently, the three support levels appear again in their inverse
at the $4,450 level.
Ethereum price
will need to break out above the upper bull flag line, top of the Cloud (Senkou
Span A), and the dominant interior angle at $4,450 to confirm a bullish
breakout.
However, failure to hold $3,800 as support means Ethereum
will likely drop down to test the $3,300 value area where a high volume node
and the 161.8% Fibonacci expansion exist.
If XRP price maintains support at $0.83, then a retest of the $1.00 value area is likely. However, any daily close below the $0.80 level would return XRP to the previous flash crash lows near $0.59.