The daily bitcoin chart trades between the lower blue and red bands in its weak zone. First, we note the Bollinger squeeze (vertical blue rectangle) - the "calm before the storm" - and then the capitulation towards $20,000 (20K). The daily stochastic is under 20, suggesting underlying solid bearish momentum (green rectangle). The longer the oscillator maintains these levels, the greater the chance that the 20K level breaches to the downside.
We're keeping an eye on the hourly timeframe. Here, both the trend-following EMAs and the stochastic have crossed negatively (black ellipses). So if the EMAs develop angle and separation to the downside and momentum pushes the stochastic to its lower quintile (blue arrow), there is a good chance that the 20K falls.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.