Bitcoin vs USD - Potential Bullish Doji Star To Save The Day?

Welcome to my update on BTC vs USD!

Let’s get straight into shall we? As I have previously mentioned, after forming a double bottom, we found ourselves trending upwards in an ascending wedge pattern which allowed us to finally break out of the long term dashed descending down trend channel. Now being an ascending wedge; which is a bearish pattern - it was pretty much destined that we would fall to the down side of it which we have now done. Although it is worth noting that we did have a failed breakout to the upside occur on 24/04/2018 indicating that the bears still have a real battle on there hands right now!

Over the last 6 days we have confirmed the 50 EMA as support after the recent bearish crossover of the 200 EMA that occurred back on 04/04/2018. This makes it a bit more difficult for the bears to sink us lower; though we are currently also contending with the 23.6% Fib which has some fairly heavy resistance behind it (and has thus far prevented us from breaking through and opening above it).

So where does this leave us? Well essentially we are stuck between the overhead heavy resistance; and the strong support below us – essentially placing us in a no trade zone. Looking at the Aroon Up/Down – we have some indication that bulls still may have the edge (Aroon up is sitting at close to 94, whilst down is around 2). Whilst the RSI at time of writing is at about 57 indicating we are not overbought nor oversold; so there is some room for growth further upwards before reaching overbought territory. The MACD is still trending above the signal line and is currently at about 57 showing a level of indecisiveness.

In some possible good news for the bulls; we are potentially forming a bullish doji star candle stick pattern, which if completes could provide us with the momentum to break through the overhead resistance. If this does occur and we have a confirmed break out into the buy zone, then it should propel us to the 38.2% fib for a test of resistance here – this is our target zone if we breakthrough the resistance. In addition this move would also confirm the overhead resistance as new strong support.

Here is what a completed Bullish Doji Star looks like:

On the flip side if we lose support of the 200 EMA then we will likely drop back to for a test of the 50 EMA. If the 50 EMA fails to hold us, it’s not much further down until we have some strong support which will hold.

So for now, we wait! We need to wait and see if our bullish doji star plays out and we can breakthrough the overhead resistance, else we sink lower and have a nice buy zone around the heavy support.