An important change of character may have occurred over the last few days in Bitcoin.
Since July this year, we haven't seen any sustained activity down below the Kijun Sen indicator until now. Up until two weeks ago, probes below the Tenkan Sen were rejected quite quickly to the upside with solid buying coming in. The last break out below the TS was met with failure in the immediate reaction by buyers in the bullish white bodied candle. It was a good attempt but the sellers returned quite strongly to test to the KS which hadn't seen sellers trade through there since late July. Four days ago we saw the important close of price action below the KS and the noted change of character, where the sellers were previously losing commitment below the KS, now the buyers have been losing commitment.
It suggests that a long overdue correction may be probable.
We should be looking to support at the previous major swing low around 3600 and with it being just inside the top of the Kumo (the cloud), it looks like it may be an area where we could see a pause in the 1st time frame down trend.
Looking at the hourly chart, the BBs are very wide, suggesting that we may have seen the low put in for the day and we could see a retracement back up to 4065 or possibly up to a large zone for previous support from 4120 to the mean at 4176.
Looking at the daily bands, we also see the important change of character in this market.
Where the buyers were previously trading with a strong bullish tone above the upper band and in the upper half of the bands, constantly finding significant support at or just through the middle, now, we shave seen over the last few days trading in the lower half with weak indecisive trading below the lower band. It suggests that the buyers certainly have lost the strength which saw it test the round number 5000 and with some solid bearish closes below the bands could see the above sell off come to fruition.
The weekly chart certainly does support the idea of a much-needed retracement and mean reversion but we do need to watch upper band support at 3872. A bearish close though this level at the end of the week could eventually see the round number 3000 eventually tested, whilst still maintaining a healthy higher time frame up trend.