Hi all, interesting chart at the moment! Since the January top,...

Hi all, interesting chart at the moment!

Since the January top, price has been contracting in to a wedge as the supply vs demand battle gets tighter, and this coiling can result in an explosive price move when it resolves. Over the last two weeks, there's been a clear zone emerge between 0.85 and the recent minor top of 0.885 where supply has been drawn out and sellers have been holding the line to turn price back down, while demand has been stepping in at higher levels and advancing on the sellers. The last move down took longer and more "effort" than the initial distribution following the January top, resulting in a bullish momentum divergence to add weight behind the current move up.

There's obviously still supply coming in above 0.875 and today price closed well off the highs but in the top half of the bar. Price is now above and sitting on top of a nice fat volume shelf where it will often bounce off or get stuck inside for a while, so potentially there's a decent support cushion to soften the blow from some negative macro news. However, if price manages to get above 0.885 there's not much past trading left to stand in the way of a nice move up. There's not going to be a lot of holders stinging to sell and get out because they bought at the highs and were "trapped"- the highs weren't long enough ago and the retracement deep enough to have created an army of fist-shaking stale holders ready to leap at the chance to break even.

On the other hand, if price breaks up past 0.885 it will attract further buying from some breakout traders and people adding to positions and also hit the stops of a few short traders which all adds fuel to the fire. A pile-on that could result in the upward capitulation of price- like I said it's a very interesting chart at the moment.

Good Luck, Rooster