The BTC USD chart shown in this analysis is a 4 hour timeframe, with commentary provided below based on the numbers marked on the chart in an ascending order.
(1) Bitcoin bullish price channel that arose from a Head and shoulders bottom (inverted Head and shoulders) pattern that confirmed after price close above ~$6,869.60.
The implication of the Head and shoulder pattern based on price projection has run its course leaving the current bullish channel in Bitcoin (BTCUSD). Also adding to the current bullish scenario is the break above the long term bearish trendline with price action establishing higher highs and higher lows.
(2) ~$7,554.80 and $7,296.60 indicate support region for Bitcoin (BTCUSD) with price reaching the top of the channel at ~$8,500.10. The horizontal support region is well within the bottom of the channel, which increases the chance of a possible sell off that should target the support region as mentioned above. Price reaching and consolidating around support implies higher price that should see Bitcoin move above $8,500.
(3) The green line marked on the BTC USD chart and on the RSI indicates a bearish divergence which suggests also that the current bullish momentum has run out. It is therefore better to have momentum confirm the resumption of the bullish trend before establishing long (buy) positions.
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