Looking at the Supply and Demand Zones for BTCUSD

Bitcoin has rallied back recently from recent lows.  The doom-and-gloom that existed due to the presence of a descending triangle pattern for Crypto Market leader Bitcoin has not been completely eliminated, but it was beaten back.  The measured move bearish breakout just did not happen and this failure to breakout along with some positive news took the price back to where it was in May.  Other Cryptocurrencies followed suit in the comeback albeit not at the same time as the market has not been moving in lockstep.  What themes can we gather from Bitcoin’s recent upward movements and what price zones should we be watching?

BTCUSD

BTCUSD Hourly Chart

Currently, at moderate volatility and with the candle wick in the Supply zone and the body outside of the supply zone, there is an opportunity for downward movement.  However, there is a Demand Zone lurking below providing support.  If the demand zone is broken through there is a clear path 6686 and below, in fact, 6165 could be a logical level that the price crashes down to if the price plunges below 7236.

It is very clear that there is quite a bit of resistance.

BTCUSD 4 Hour Chart

The price is caught in a tight Supply and Demand Zone with a pair of Supply Zones above providing resistance.  The main obstacle to reaching 6183 on this chart is getting through the one Demand Zone below.  A high and rising ADX with the wick touching the Resistance Zone may not necessarily be reliable.  An ADX between 25 and 40 is typically preferable.

One of the questions some may ask is “How can the descending triangle pattern be completely rejected?”

It is a matter of the price rising above one of the previous high bumps.  The 4 Hour Chart zoomed out further gives the clear answer.

It appears tough to overcome, but there seems to be a inverse Head and Shoulders Pattern of sorts on the 4 Hour Chart with a rounded bottom pattern indicating the resurrection of BTCUSD.

In the larger scheme of things, BTCUSD has a big Demand Zone that has held up as a Support Zone, bouncing the price back up.  However, this zone is losing strength and its power to propel the price back up may not be enough to overcome the two Supply Zones as illustrated below.

On a 10 period Relative Strength Index, the price on a Daily Chart is just outside of Overbought territory, it is already in Overbought territory on a 10 period Relative Strength Index on a 4 Hour Chart.  This is just as the 7521 Supply Zone is being reached.

On the Upside, Look for:

In the near-term, 7434 to 7745 is the price zone to watch as if it is broken, there is a clear path to the mid 8000s and it poses a significant opportunity to breaking the bearish fever of BTCUSD in 2018.

On the Downside, Look for:

In the near-term, 7340 to 7231 is the price zone to watch as if it is broken, the price may encounter little friction to downside to the mid 6000s.  The descending triangle would not be “perfect”, but it would remain in effect and the downward breakout potential would continue to exist.

The post Bitcoin (BTCUSD) Supply and Demand Zone Levels: July 19, 2018 Edition appeared first on Freevestor.