It's been a couple of days since my last update, mainly because there haven't been any major changes in bitcoins price. Since the big drop on the 19th and subsequent bounce, bitcoin has continued to trend lower with occasional small bounces up to the 4-hour 21 EMA.
Even after about five days, it is still too early to determine which direction bitcoin is heading in the long term.
Bitcoin 4-hour Chart
Looking at the 4-hour chart you can see how bitcoin has been trending lower and unable to push above the 21 EMA. This morning, however, bitcoin was able to close a 4-hour candle above the 21 EMA. This doesn't automatically mean that the correction is over and bitcoin is just going to rocket higher. It is possible that this is just a temporary push above and bitcoin could drop below the 21 EMA again. I would sort of be surprised if bitcoin did stay above on its first try bit we will just have to wait and see.
Bitcoin Daily Chart
Zooming out to the daily chart you can see that even though bitcoin is looking better on the 4-hour chart it still doesn't look too good on the daily time frame. Bitcoin needs to first push above the 7 EMA then it still has the 200 EMA (not shown) and the 21 EMA to push above. I will be looking to the longer time frames to determine if and when this correction is over. It is very possible we could see bitcoin push up to the 21 EMA and rollover creating a lower high in the overall downtrend. Even if bitcoin does create a lower high, what I will be watching for is if it can then rebound and create a higher high, which then could be the beginning of a new uptrend.
Bitcoin Daily Chart-2
The chart above shows the price action that I would be looking for if bitcoin is rejected at the daily 21 EMA. First, though, bitcoin needs to push above the 7 EMA so until it does that there is no guarantee that it will even make it up to the 21 EMA. If bitcoin's price action can come anywhere close to what I have in the chart above that would go a long way towards convincing me that the correction is over. Even if bitcoin rebounds and the correction ends it is possible we could see a period of sideways consolidation which could last for quite a while. All we can do is watch and wait, patience is key when investing or trading.
That's all I've got for now, take care!