You may have noticed that the price has been moving strictly within the boundaries of the triangle, that we outlined in our previous review. The volatility remains low. The triangle got punctured downwards but this has not led to a downward movement
The bears haven’t even managed to test the previous support level of $3,570. The bearish offensive weakened at $3,600 enabling the bulls to push the price to $3,680. At the moment of writing the price is between the moving averages.
The EMA50 is below the price at $3,684, the EMA100 is at $3,704. The quicker EMA is looking up approaching the EMA100. If it crosses the latter from bottom up, this will form a signal for the bulls. But the presence of this signal at such trading volumes does not guarantee an ascending movement.
It is possible to speak about the ascending movement on the 1- hour chart only when the price consolidates above the EMA100 moving average ($3,704). At this juncture, we would not recommend looking for a market entry point.
On the 4-hour timeframe, the price, squeezed in the sideways channel, is between the resistance and support levels ($3,800 and $3,570, respectively) – with no priority for further movement in either direction. The moving averages are above the price and tend to go down, which suggests a down trend dominance. The EMA50 is at the $3,743 level and the first resistance in an upward movement.
The EMA100 at $3,870 also acts as a resistance. The MACD indicator is in the sell zone, but tends upwards.
Opening transactions from the current level ($3,698) is like playing the lottery, so we recommend you to abstain and wait for a clearer market picture to emerge.
The day timeframe
On the day timeframe, we see stronger support and resistance levels, where trading occurs ($3,215-$4,500).
A triangular pattern can be built on the day timeframe. Trading occurs at the price close to its lower boundary and a downward puncture to the previous-year low of $3,215 is quite likely. We have never ruled out such a retest.
The moving averages are above the price and tend to go down. With an upward movement, the first resistance is at $3,800, then the current EMA50 at $4,066.
Generally speaking, the bears dominate and a scenario with an attempt to test the minimum or approach it is more likely. A decline to $3,400 cannot be ruled out.
In such a situation, it is better not to do guess work or play with the market, but to refrain from trading. We are sure to inform you about all changes and market entry points.
We wish you all good profits.