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Bitcoin Morning Update, 8/23/18

08/23/2018 11:05

Good morning all,


What's going on with $BTC #Bitcoin?

We recently had a very nice bull break of that $6650 resistance area on steady volume, but it turned out to be a big old bull trap. 

Bull break:


And full retrace of gains :  Notably here on the 1 hour chart we saw a tweezer top and then a full retrace of that long green candle. In theory the base of that green candle should have held as support, and when that broke it was a major bear signal.



Let's look at big picture -

We had some ETF denials last night - 

BREAKING: SEC issues disapproval orders for ProShares Bitcoin ETF, ProShares Short ETF, and 5 bitcoin ETFs proposed by Direxion.

Since we were actually dropping in price PRIOR to this news, I had theorzied that the bear gains were being baked in, and we might actually BOUNCE on denial news:
"If buy the rumor sell the news is a thing, and we are falling in anticipation of ETF rejection. Shouldn’t the price of bitcoin actually RISE on rejection news? Thought experiment "



So where are we now? Let's look at the daily chart-

$BTC #Bitcoin Daily Chart -

Even though we broke that key resistance of that $6650 area, we fell back below and were unable to hold it, so we can consider this an "Upthrust", which is especially bearish -

What is an Upthrust? "Springs and upthrusts are false breakouts that can trap the unsuspecting trader. Both patterns quickly reverse, with the stock or index then often testing the opposite end of the trading range"

So basically it's a false breakout.

StochRSI is reaching short term overbought, OBV is looking weak and the RSI shows room to run. For now we have to assume the price will be unable to break this resistance of $6650 again watch for lower support to be tested. Lower support is $5755 to $5850, and for now that's where I'm watching. Of course if we can break that $6650 resistance again that would change my thinking.





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