Hello everybody, Bitcoin seems to be doing exactly what I predicted 2 days ago so far, this is a good sign for the continuation of the bull market!
Retracement and Bounce
Bitcoin broke out of the falling wedge pattern on the 1H timeframe, hit its head on the 0.786 fib level, retraced back to previous support levels, where it gathered enough momentum for an explosive move to the upside breaking the 0.786 and now it's testing it for support. The retracement to 0.618 and then the bounce off it is a great sign that we found strong support at 37,500$ and if we get more downside in the near future look at this level for support. Bitcoin is now testing the 0.786 level and the hourly 20 EMA for a new higher support level to then attack the 42.500$ level again, hopefully breaking it and holding 43k as support in the future
Crucial Point
Bitcoin is now at a crucial point for the short term. If it can hold this 40k level as the support we're looking at a retest of 43k in the near future, otherwise, it will roll down back to 37k with a possibility of forming a triple bottom on the 4H timeframe, and then blasting off to retest the 43k level. Both scenarios are likely but personally, I'm hoping for a retest of 37k and the daily 20 EMA, for more accumulation of momentum to hopefully get a very quick and powerful move to the upside, instead of a gradual creep up.
Why I Believe 37k is Likely
On the daily timeframe, we can see that a bullish EMA cross is a great indicator, yet I think we might be a little overextended from the 20 EMA at the moment, the same reason why the 43k move stopped and retraced back to the 20 EMA. Usually, after a daily bullish 20 and 55 EMA, we have a period of a couple of days or even weeks where we keep testing these EMAs for extra confirmation that they are acting as strong support. The longer we stay around these levels the higher the EMAs climb, giving us support at higher prices, until an eventual explosive breakout to the upside like in early October of 2020.
Final thoughts
Overall we're looking great on all timeframes, I'll be putting a small long order at 37k expecting another wick there in the near future though. Remember if we lose the 0.618 support we might be inbound for another dumpy week, but otherwise, we're looking great for continuation!
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Disclaimer
This is not investment advice, I'm just a dude who loves to look at charts, not some hedgefund :)