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Bitcoin Rise Stops at Strong Resistance Level

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Written By: Alejandro Zambrano

May 23, 2019, 17:39 BST 17:39

Summary:

Bitcoin recently made two failed attempts to break above the strong multi-month resistance level at $8290 as traders booked profits. What is our outlook?

Bitcoin recently made two failed attempts to break above the strong multi-month resistance level at $8290. The same level stopped Bitcoin bulls in their tracks in July 2018. See point A in the chart below. The resistance zone near the resistance level at $8290 was strengthened by the upper daily Bollinger Band.

The last downward reversal from $8290 created the daily Japanese candlesticks reversal pattern Long Legged Doji – which was preceded by the daily Bearish engulfing reversal pattern when Bitcoin tried to break above the resistance level 8290.00 earlier this month. Both of these reversal patterns indicate a strong probability of Bitcoin to correct to the low of wave (4) at $7000.

Bitcoin Daily Chart

Written By: Alejandro Zambrano

Alejandro Zambrano combines extensive professional experience and a pragmatic attitude to trading, building clients’ understanding of the markets and the rationale behind investing. Zambrano was the Chief Market Strategist of the FCA regulated broker, Amana Capital. Prior to that, he was also the Head Analyst at FXCM’s London research desk. Interact with Alex via Twitter at @AlexFX00.