Last week and this Monday, we’ve have many potential headliners for financial markets. Which should be the main one? Decline on stocks? Rise on gold? Or maybe it should be today's surge on bitcoin? It’s hard to tell, but in this piece, we will focus on the cryptocurrency.
Bitcoin is a savage; the coin tried to erase the whole monthly drop in one day! BTC received a boost after defending the support at 5,900 USD (yellow) (from a technical point of view). No surprise here as this is the ultimate long-term level, which is crucial for the situation on this instrument. A breakout would be lethal, so the bulls are trying to protect it at all costs. Does that bring us a buy signal? Not yet. We are still beneath the lower line of the descending triangle pattern (blue) and the horizontal resistance at 6,800 USD (orange).
As long as we remain below these, there is no buy signal yet. Only the price closing the day above them will be an invitation to buy. The second half of the European session brought us a drop, which could potentially be very dangerous. A long wick on the daily candlestick is never good, especially when it touches the ultimate resistance.