I drew the pitchfork with the data from the last drop and the bottom at Mar 29th. So far BTC has tracked remarkably well on the daily and weekly charts over the past 6 weeks.
Overview
Let's review what Bitcoin has been doing since April 1st.
The bottom of the pitchfork acted as support 4 or 5 times in April. (Green Arrows)
Then the price hit the median line and acted as resistance. It took 7 attempts to break through it. (Red Arrow Icon) It broke through the median line on very high volume and this sent the price through the top of the pitchfork. (very bullish)
Notice how the roof of the pitchfork now acts as support for all but 3 days during the sell off.
The price broke upwards through the green descending trend line for 2 days starting on May 7th and May 8th before falling back below it which started the sell off down to the median line. It bounced off of the median line back up to the roof of the pitchfork which is now acting as support. Today it broke through the green descending trend line again and we are waiting to see if it holds.
Where does BTC go from here?
The daily and weekly trends in my opinion are quite bullish. Just look at the volume that drove Bitcoin from the basement of the pitchfork to the roof.
1-If we get a pullback I would be looking to find support at the median line of the pitchfork once again. If volume continues to be high then it should be a quick bounce and we will be back on the roof in no time. Notice the VPVR has max volume near the median at 8700. This too should act as support.
2-Without sufficient volume the descent will last a couple of weeks and we will hit the bottom of the pitchfork (there are worse places that being in the basement). It should find support there and we will move higher but with less momentum so we may be travelling upwards in the green channels. Without the high volume it will be quite a while before we're sitting on the roof again.
3-The only way for Bitcoin to be bearish again is if it breaks out through the bottom of the pitchfork. (red arrow line) This can happen if we get really bad economic news and the S&P500 tanks big time. If the GDP really is -15% this will not bode well for the economic markets. Everything will plunge. Some are saying -30% GDP is possible later this year because 30% of the small businesses that have closed, may never reopen. We have to prepare ourselves mentally that there could be outside forces that will drive the price of Bitcoin drown dramatically. Now the good news is if we use this pitchfork we will see it coming. If the price breaks downward through the median line with no support I may consider exiting my long positions and wait for a bounce off of the bottom of the pitchfork where I can re-enter it at a lower price. If it falls through the bottom of the pitchfork then I will consider entering a short position. At the very least I would sell all my alts and wait by the sideline if it falls out of the bottom of the pitchfork. But if the price then moves back into the pitchfork and stays there, I will exit my short positions and I will go back to being long. At least that is what I would do. You will have to do your own due diligence when buying or selling crypto currencies.
If you found this road map useful please hit the like button. It will help motivate me to publish analysis work.
Overview
Let's review what Bitcoin has been doing since April 1st.
The bottom of the pitchfork acted as support 4 or 5 times in April. (Green Arrows)
Then the price hit the median line and acted as resistance. It took 7 attempts to break through it. (Red Arrow Icon) It broke through the median line on very high volume and this sent the price through the top of the pitchfork. (very bullish)
Notice how the roof of the pitchfork now acts as support for all but 3 days during the sell off.
The price broke upwards through the green descending trend line for 2 days starting on May 7th and May 8th before falling back below it which started the sell off down to the median line. It bounced off of the median line back up to the roof of the pitchfork which is now acting as support. Today it broke through the green descending trend line again and we are waiting to see if it holds.
Where does BTC go from here?
The daily and weekly trends in my opinion are quite bullish. Just look at the volume that drove Bitcoin from the basement of the pitchfork to the roof.
1-If we get a pullback I would be looking to find support at the median line of the pitchfork once again. If volume continues to be high then it should be a quick bounce and we will be back on the roof in no time. Notice the VPVR has max volume near the median at 8700. This too should act as support.
2-Without sufficient volume the descent will last a couple of weeks and we will hit the bottom of the pitchfork (there are worse places that being in the basement). It should find support there and we will move higher but with less momentum so we may be travelling upwards in the green channels. Without the high volume it will be quite a while before we're sitting on the roof again.
3-The only way for Bitcoin to be bearish again is if it breaks out through the bottom of the pitchfork. (red arrow line) This can happen if we get really bad economic news and the S&P500 tanks big time. If the GDP really is -15% this will not bode well for the economic markets. Everything will plunge. Some are saying -30% GDP is possible later this year because 30% of the small businesses that have closed, may never reopen. We have to prepare ourselves mentally that there could be outside forces that will drive the price of Bitcoin drown dramatically. Now the good news is if we use this pitchfork we will see it coming. If the price breaks downward through the median line with no support I may consider exiting my long positions and wait for a bounce off of the bottom of the pitchfork where I can re-enter it at a lower price. If it falls through the bottom of the pitchfork then I will consider entering a short position. At the very least I would sell all my alts and wait by the sideline if it falls out of the bottom of the pitchfork. But if the price then moves back into the pitchfork and stays there, I will exit my short positions and I will go back to being long. At least that is what I would do. You will have to do your own due diligence when buying or selling crypto currencies.
If you found this road map useful please hit the like button. It will help motivate me to publish analysis work.
Comment:
It bounced off of the red VPVR line and came within $30 of hitting the median line of the pitchfork. Congrats to those of you who caught it. The price still has to get out of the top of the channel if we want a strong bull trend. If we stay above the median line but within the pitchfork then it will be a slow move upwards. We also have to be cautious that it stays above the median line otherwise it could fall out the bottom of the pitchfork and turn into a bear run.
Comment:
"The daily and weekly trends are not quite bullish now"
@Daicea, that's correct. You'll notice on the chart we had arrow #1 temporarily hit the first target and fall back down. At times like this I wish I had drawn the arrow#1 line much higher. :-)
On June 11th the price fell through the pitchfork's median line and this marks the (temporary?) end of the bull trend. We could be in consolidation phase as indicated by arrow#2. We are finding support on that green trend line for now. If we fall through that green trend line we may fall as low as 8.7k before gaining strength for a surge higher. This pullback is necessary if we are going to break 10.5k. We had gone up 250% in less than 3 months and we cannot keep up that pace without pulling back taking a rest and consolidating (gaining strength).
The 3rd option is when we fall through the bottom of the pitchfork to the 8.7k support line. This is where a lot of the volume buying occurred. If we don't hold this level, then we are going much lower. If you look at the VPVR histogram you will see there is just empty air below 8.7k to a little support at 7.3k. Below that we have clear sailing down to 4k. You can think of 8.7k as a ledge in the Grand Canyon wall. If we fall off of that, we better be wearing a parachute!
This pretty much jives with my other article "Update: BTC Indicator finds support & resis. levels the easy way" where I said if we fall through any of the fib support lines then we can drop quite quickly. You'll notice the last time we fell through the bottom fib line of that chart, we had a nice bounce around 8.7k. Let's hope we get it again this time.
That is how I see it. Please do your own due diligence when buying or selling cryptos.
@Daicea, that's correct. You'll notice on the chart we had arrow #1 temporarily hit the first target and fall back down. At times like this I wish I had drawn the arrow#1 line much higher. :-)
On June 11th the price fell through the pitchfork's median line and this marks the (temporary?) end of the bull trend. We could be in consolidation phase as indicated by arrow#2. We are finding support on that green trend line for now. If we fall through that green trend line we may fall as low as 8.7k before gaining strength for a surge higher. This pullback is necessary if we are going to break 10.5k. We had gone up 250% in less than 3 months and we cannot keep up that pace without pulling back taking a rest and consolidating (gaining strength).
The 3rd option is when we fall through the bottom of the pitchfork to the 8.7k support line. This is where a lot of the volume buying occurred. If we don't hold this level, then we are going much lower. If you look at the VPVR histogram you will see there is just empty air below 8.7k to a little support at 7.3k. Below that we have clear sailing down to 4k. You can think of 8.7k as a ledge in the Grand Canyon wall. If we fall off of that, we better be wearing a parachute!
This pretty much jives with my other article "Update: BTC Indicator finds support & resis. levels the easy way" where I said if we fall through any of the fib support lines then we can drop quite quickly. You'll notice the last time we fell through the bottom fib line of that chart, we had a nice bounce around 8.7k. Let's hope we get it again this time.
That is how I see it. Please do your own due diligence when buying or selling cryptos.
