Bitcoin reached the $12000 Target level I set on my previous analysis with relative ease as it followed this fractal shown below:
What's next? In my opinion and based on all relative trend-lines involved, it is the $13900 Top made in June 2019!
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** Former Resistance turned into Support? ** First of all I will start with the obvious big news made yesterday. After marginally breaking $12000, the price quickly pulled back as most traders who have been (rightly so) accumulating during June/ July, booked their profit. The pull-back stopped exactly on the former 11 month Resistance of $10500. Will it turn into a Support now? If yes, that would be incredibly positive moving forward. So far we see some buying activity, although the price has been mostly consolidating after the initial sharp buying at 10500.
** The dominant pattern ** As seen on the chart, if we ignore the noise of the sharp COVID collapse on March, the pattern that stands out is a Channel Up since late November 2019. It is obvious that the Channel's median is playing a much important role that its top/ bottom (HH, HL trend-lines) as it has registered (including yesterday) 8 cluster touches, much more than the Higher High/ Higher Low trend-lines. Out of the last 7 times, 5 delivered a pull-back.
** Outsider ** Even though the Channel Up is the dominant pattern, I need to mention the role of the Lower High trend-line starting from the June 2019 $13900 High. Since May 2020, it has supported the price action with numerous touches up until the break-out started on July 21. So even if the Channel Up breaks to the downside, we can see this trend-line coming in for a last-resort Support.
** So what's the next Target ** As already mentioned, it is the $13900 Top. In fact at the moment, it makes for a perfect technical Higher High for the Channel Up, even though it is more possible to see another monthly consolidation/ accumulation phase before testing this Resistance, if the trading interest in August is low.
So wouldn't you agree with the ~14k target? Feel free to share your work and let me know in the comments section!
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Hey TS, great stuff as always... the way I'm looking at this is a tad different but in essence takes to the same point going forward... I personally use the closing prices on the 1D not the wicks for plotting single line support/resistance points, and use the wicks and tails when plotting ranges. Although we've ben very close, we haven't yet had a closing price above the 8/17/19 11,975 lower high close (1D BTC/USD Bitstamp chart)... next up is the 7/9/19 12,571 close and then we have the 6/26/19 12,927 close resistance level to break through. Once we're through that I have the next significant level of resistance projected forward from the 12/17/16 ATH of 19,650. Of course there are ranges there also if we use the wicks/tails. I use the closing price as the solid resistance line though, I guess you can call me a bit old school traditional!
TradingShot
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@cosmicnexus, Excellent overview Nex. When do you see us reach the 13k barrier?
cosmicnexus
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@TradingShot, I dunno... I'm looking at clearly defined resistance/support points for use as possible trade signals and to establish risk/reward ratios versus trying to project a future date/price combination. So for example, using closing prices the most recent level of support is between app. 10,900 to 11'ish. That indeed appears to be confirmed by both yesterday's green candle w/ a tail that did not drop further than app. 10,900, and so far today we have a red candle but it's tail does not go below 11K... one could possibly take a swing trade here, but we could yet see a drop back down to the next level of support at around 9,100 level, in which case taking a trade there the risk/reward is better.
The logic I'm using here is that because we have not yet seen the 11,975 level broken through with a solid close that gets confirmed above that level, our potential 1st goal for a gain when entering a swing trade right now is at that 11,975 level, but the risk of dropping back to the first level of support is also very real, and in that case the risk (1,900) to reward (975) setup is very poor, so if that closest level of support gives way then you'd better have a tight stop loss in place. Therefoe placing a swing trade right now is risky IMHO. This is why I feel it's important to establish the resistance levels with the closing prices which are much solider an indicator.
This does not matter much for accumulation purposes if one is going to hold it longer term and take the slow ride up. Now could be a reasonable time to do that. If we drop through the closest level of support it will down into 9'ish range it will be an excellent time to do that!
AlphaBotSystem
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That is an interesting perspective. Will keep an eye on that channel for sure. Here is what we have