BITCOIN Rejected on July's Resistance buy can this save the day?

Last week we covered the Lower Highs trend-lines involved on Bitcoin's (BTCUSD) medium-term price action (see chart below) and how each break-out would be a Resistance break targeting the next in line:


The Lower Highs 1 trend-line broke and almost hit our 27550 Target but the rejection on Lower Highs 2 (started on the July 13 High) has been so far rather emphatic. This was also a near 1D MA200 (orange trend-line) rejection that pulled the price back below the 1D MA50 (blue trend-line).

As discussed previously, the Fibonacci retracement levels play an important role on this price action. It should be no surprise that the 0.236 Fibonacci is holding so far this pull-back, while the rejection took place on the 0.382 Fib.

On the bright side, the 1W MA50 (red trend-line) remains the long-term Support, while the 1D RSI is on a Bullish Divergence (Higher Lows as opposed to Lower Lows of the price). As a result, we may see Lower Highs 2 break especially if the pattern transitions into an Inverse Head and Shoulders (IH&S). Technically such patterns target the 2.0 Fibonacci extension from their neckline. Surprisingly that is marginally below Resistance 2 (30220) and the 0.786 Fibonacci (30350). A straight 30000 target would be best for the medium-term.

We don't consider buying below Lower Highs 2 optimal, unless a new (last) pull-back towards the 1W MA50 occurs (excellent value entry). It would be more optimal to enter after a 1D candle closes above Lower Highs 2 or better yet a confirmed break of Resistance 1 (28150), which would be also a break above the 1D MA200.

So what do you think? Can this Inverse Head and Shoulders finally break above the Lower Highs and save the day for BTC? Feel free to let us know in the comments section below!

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