Bitcoin has been battling with our DMA50 resistance, is now printing hidden divergence on the daily, and we have potential for cross looming.
The recent short squeeze managed a 38.2 fib retracement after our drop from our 24 December swing high, so I have a 168.1 fib extension target of $2780 if we fail to get above DMA50.
Although we had a strong candle on the squeeze, we lacked any follow-through for a continuation of a rally, and once we reached DMA50, our buying dropped off, unlike the build up of buying when we bounced from our December lows.
A healthy rally would entail us taking the stairs up and elevator down but this was an elevator straight to our DMA50 resistance.
We could potentially have a drop / bear trap from here, breaking below WMA200 to set new lows, invalidating the triangle from my previous chart and forming support of a large , triggering stops just below $3k.
Bitcoin should then have a dead cat bounce, first back above WMA200, then to resistance, and then a breakout with a $4200-$4400 resistance target sometime towards the end of March / start of April.
When btc reaches $4200, I suspect we'll encounter strong horizontal resistance as we have since we dropped below $4500 in November last year and we should meet our DMA100.
Depending on the strength of trend and bottom-calling fomo, we should have a 38.2 fib retracement back to our 61.8 fib support, somewhere around $3670, which will give us 168.1 fib bull trap extension target of $5110 (to DMA200) once we break above that $4240 - $4480 and DMA100 resistance.
If we have a deeper 50 fib retracement to $3500, I'll revise my bull trap target to $4770, which would be a 138.2 fib extension target.
We should then potentially drop back to our $3k support, extending the bear market, with a move to new sub $2500 lows.
Have a look at the NVT indicator which gives us a network value to transactions ratio and has been quite accurate so far on the for predicting the bottom/top.
You'll see that we're in a great buy area on the weekly chart (flashes green for buy red for sell), but we still haven't bottomed yet on the , and you'll see that there was only 1 day where it flashed green in 2015 and that was during capitulation.
Previous chart and potential to new lows from here:
Scenario where we've already bottomed: