No Negativity, All Happiness, I Promise — BITCOIN! (BTC)
Hi friends! I hope you are all having a very peachy and pleasent day. With a heart full of love and joy, I'd like to welcome you to this update analysis on Bitcoin! But before we begin, I would like to speak on my recent analyses about BTC, LTC, ETH, XRP and others that could go to zero. A lot of people are under the impression that I have a downside target of zero or something. That is definitely NOT the case. All I was trying to do, is show you the very real potential that exists, for these markets to fall to zero, given the enormous size of the bearish formations, and their distance from zero. So, yes, a correction to zero COULD happen, based on the size of these patterns, but that doesn't necessarily mean that it WILL happen. I have said countless times, that patterns don't always rally or correct to their full potential. If you've been following me, you've surely seen me write about that. However, these patterns are very huge, and very bearish, and that increases the probability of a very nasty decline, when this market really starts to break down. There hasn't even been a capitulation yet. No blood in the streets. That's what we need to see! You want to know my real thoughts? Yes, I do want to see a successful future for crypto. But I want to see the fraudulent garbage die in the process. With that said, when the panic starts to destroy this market, that's when I'll be weeding through the discounts, looking for long term positions that I will, for lack of a better term, HODL. =D We aren't there yet though. In fact, we're probably a long way off from that.
Now, without further ado, let's get right to it! Looking at the four hour BTC chart, we can see that Bitcoin appears to be forming a bit of a bear flag here. As you can see, the flag is a little sloppy, with some of the wicks exiting the flag body, but the general formation is a bearish consolidation. The one thing I want to point out, though, is that the flag body is tilted slightly to the downside. When bear flags point down, and are not horizontal or trending upward, they can often times result in a breakout to the upside. With that said, the boundaries of this flag are not extremely clear, and the trajectory of the body is only slightly negative. Regardless, it is important to watch for the breakout, up or down, to determine the direction of trade in BTC and other assets, such as LTC.
We can see that volume is declining, which confirms the flagging action. Don't let that confuse you. I see a lot of comments from people talking about the absence of volume in right shoulders, and flags, and triangles, and cups and handles — you name it. It is perfectly normal for volume to decline, when a formation is building with an impending breakout. Traders naturally slow down on the trading action, in anticipation of the breakout, and that's why it is typical for volume to decrease in pre-breakout situations. When the breakout occurs, that's when we're interested in the volume. We want to see a spike in volume as a piece of evidence to confirm the breakout. In this case, if we see a breakdown of the bear flag, with an increase in volume, that would be a sell signal in BTC, and that would cascade into other crypto's like LTC and others. I'm actually watching the BTC bear flag, as a signal to short LTC. So, if I see a confirmed breakdown of this flag, that will be my signal to short LTC. If that doesn't happen, then I wont short right now.
You can see that the 20 EMA (in blue) is falling into the bear flag, and it could be resistive enough to cause a breakdown from the flag. However, if the 20 EMA is surpassed, inside of the flag, that would increase the odds of an upside breakout. In general, I am anticipating a breakdown, but I am waiting to see it before I trade. A break to the downside, would make the neckline of the head and shoulders formation the target. So, that's around 7100, give or take, depending on when it's hit.
Now, without further ado, let's get right to it! Looking at the four hour BTC chart, we can see that Bitcoin appears to be forming a bit of a bear flag here. As you can see, the flag is a little sloppy, with some of the wicks exiting the flag body, but the general formation is a bearish consolidation. The one thing I want to point out, though, is that the flag body is tilted slightly to the downside. When bear flags point down, and are not horizontal or trending upward, they can often times result in a breakout to the upside. With that said, the boundaries of this flag are not extremely clear, and the trajectory of the body is only slightly negative. Regardless, it is important to watch for the breakout, up or down, to determine the direction of trade in BTC and other assets, such as LTC.
We can see that volume is declining, which confirms the flagging action. Don't let that confuse you. I see a lot of comments from people talking about the absence of volume in right shoulders, and flags, and triangles, and cups and handles — you name it. It is perfectly normal for volume to decline, when a formation is building with an impending breakout. Traders naturally slow down on the trading action, in anticipation of the breakout, and that's why it is typical for volume to decrease in pre-breakout situations. When the breakout occurs, that's when we're interested in the volume. We want to see a spike in volume as a piece of evidence to confirm the breakout. In this case, if we see a breakdown of the bear flag, with an increase in volume, that would be a sell signal in BTC, and that would cascade into other crypto's like LTC and others. I'm actually watching the BTC bear flag, as a signal to short LTC. So, if I see a confirmed breakdown of this flag, that will be my signal to short LTC. If that doesn't happen, then I wont short right now.
You can see that the 20 EMA (in blue) is falling into the bear flag, and it could be resistive enough to cause a breakdown from the flag. However, if the 20 EMA is surpassed, inside of the flag, that would increase the odds of an upside breakout. In general, I am anticipating a breakdown, but I am waiting to see it before I trade. A break to the downside, would make the neckline of the head and shoulders formation the target. So, that's around 7100, give or take, depending on when it's hit.
Comment:
Bitcoin has just touched the neckline support area. If you look closely, you can see that it as created a cup and handle type formation here in the right shoulder...
Comment:
I've adjusted the neckline of the head and shoulders pattern, to be more accurate, by catching the exact bottoms of each side of the head. Then new breakdown level is in the 6400 range.
Comment:
The latest update is here! Enjoy.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-Magic loves you-
-JD-