Bitcoins Capitulation Confirmed - Bounces Off Support As Cryptos & Stocks Rally Higher
Good News For Bitcoin & Crypto Investors
Overnight Bitcoin tested support levels and rallied higher as capitulation in cryptos and US stocks forced a sharp rally higher.
Yesterday I posted here on Steemit of the possibility that a capitulation was close and to confirm this, it was essential that the approaching support level was respected and the price action moved higher from those levels.
To view yesterday's post on Bitcoin Click Here
Observing the daily chart candle today we can see that the price action fell further as predicted before staging a bullish reversal pattern. The $5800 - $6000 price level held and quickly moved higher where its sitting around $7,600 a huge 26% rally off the lows overnight.
Currently the technicals are support the move higher as the momentum stochastic indicator has formed a bullish cross and momentum is now rising although its still in the red. (See circle and rectangle below price action below)
If the momentum can be sustained the likely price target is the upper level of the downtrend channel & resistance level around the $8,900 - $9,000 price level.
This would be welcome news for crypto investors who have recently been smashed with ongoing selling experienced in the last month.
Ether Joins The Bullish Party
Yesterday I mentioned in my post that Ether's fortunes for now are tied to the swings in Bitcoin.
The price action in Ether didn't disappoint as the price moved considerably higher after it too touched the support level of around $590 - $600 level, before moving higher to be currently sitting at the $770 price level. This equates to a 28% rally from the lows overnight which is a big swing if you were able to catch the lows.
The momentum indicators are not as bullish as Bitcoin as the momentum indicator has moved higher although its still deep in the red. The stochastic indicator has not quite formed a bullish cross and would require 1 or 2 more trading moves higher for this to occur.
The other bullish indicator for Ether is that Ether was able to hold support of $600 for the 3rd time forming a triple bottom which is bullish for the short to medium term.
This is likely to occur if Bitcoin continues to rally higher for the short term.
If Ether can break through the next level of resistance around the $850 level its possible that the price action for Ether could reach the $900 - $1,000 level which would be the upper level of the downtrend.
US Stocks Rallying Helps The Cryptos Bounce Higher
The previous trading day saw the US stock market in a tail spin as the DOW recorded the biggest point loss in a single day with just over 1,100 points drop in the market.
In today's action the DOW and the rest of the US indices were able to claw higher after starting the day lower, finishing an impressive 550 points higher for the day. Although the gains were only half of the previous days losses it was welcome relief for traders and investors who still held onto to their positions.
The fact that US stocks were able to lift themselves out of the red today was a major contributing factor for the Cryptos moving higher, as money went back into risk assets after the big falls the previous trading day.
Keep in mind the markets have been extremely volatile so extreme caution is required as the swings in prices could continue for the rest of the week
Happy trading and stay CALM.
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Disclaimer: This post is for educational purposes only, and all the information contained within this post is not to be considered as advice or a recommendation of any kind. If you require advice or assistance please seek a licensed professional who can provide these services.
Sources:
Click the links below to view my latest Steemit posts:
The Markets Are In A Panic - Are We Close To A Capitulation In Stocks & Bitcoin?
Sydney Real Estate Investors Are In For A Rude Shock As The Market Finally Cools Down
Bitcoin BTC - Is A Breakout Imminent As US Stocks Come Under Pressure?