BTC Not THE bottom but long awaited correction to the upside
The fall after 10k rejection was long and brutal. Is it over? Spolier alert: Most likely not.
However, nothing goes up or down in a straight line, and when you see a large move in either direction, expect that the potentially large correction will eventually follow.
In my previou analysis I've been showing the bullish RSI divergence near the bottom, as well as the falling wedge formation. The volume was also dying off near the bottom, indicating the sellers need to take a break.
The breakout finally happened, and the green candle with that much volume usually signals that there will be followup in the upward direction. Therefore, we can assume that this is the long awaited corrective move to the upside.
There could be a slight pullback (already in process right now) before continuation upwards. The support levels are marked on the chart.
The price should not close below 7200-7150, or else this whole move will likely lose steam and it could indicate a bull trap.
Based on the previous supports turned resistances, the targets are:
1. 7596
2. 7775
3. 7919
4. 8040-8150 (strong resistanse zone, highest chances for rejection IF it reaches there)
The price may reverse at any of the targets, since they are all viable resistances on the way up.
Be smart and take partial profits along the way.
Keep in mind, this is a counter-trend move (main trend is still down), so use a stop loss and proper risk management.
However, nothing goes up or down in a straight line, and when you see a large move in either direction, expect that the potentially large correction will eventually follow.
In my previou analysis I've been showing the bullish RSI divergence near the bottom, as well as the falling wedge formation. The volume was also dying off near the bottom, indicating the sellers need to take a break.
The breakout finally happened, and the green candle with that much volume usually signals that there will be followup in the upward direction. Therefore, we can assume that this is the long awaited corrective move to the upside.
There could be a slight pullback (already in process right now) before continuation upwards. The support levels are marked on the chart.
The price should not close below 7200-7150, or else this whole move will likely lose steam and it could indicate a bull trap.
Based on the previous supports turned resistances, the targets are:
1. 7596
2. 7775
3. 7919
4. 8040-8150 (strong resistanse zone, highest chances for rejection IF it reaches there)
The price may reverse at any of the targets, since they are all viable resistances on the way up.
Be smart and take partial profits along the way.
Keep in mind, this is a counter-trend move (main trend is still down), so use a stop loss and proper risk management.
Comment:
Well, that was fast. :)
Comment:
Our first target 7596 has been reached (touched 7600), after an expected pullback to the targets inside the support zone shown on the chart above.
Expecting a consolidation here between 7450 and 7550 before the next attempt towards our next target at 7775.
It should not go below 7340-7350 during this consolidation if this move is to have any power. Otherwise, this could turn into a local double top, which won't be positive.
Expecting a consolidation here between 7450 and 7550 before the next attempt towards our next target at 7775.
It should not go below 7340-7350 during this consolidation if this move is to have any power. Otherwise, this could turn into a local double top, which won't be positive.
Comment:
The price seems to be struggling to break this resistance. Two failed attempts so far are forming a local double top. While it's still possible that it breaks it, it's more likely to retrace down to 7380-7450 area first. So far it's "wait and see" situation.
Comment:
Retraced exactly to the target area. However, there's a rising wedge (bearish pattern) formed, and the price is currently at the support line of the wedge.
If the support here doesn't hold, the projected target of that wedge is 7150-7100.
If the support here doesn't hold, the projected target of that wedge is 7150-7100.
Comment:
Comment:
It is hesitating near the wedge support. That could mean it will try to bounce up once more. But this wedge changes my view of the targets. It indicates bearishness and lack of strength in this move up since 7040 local bottom. Now my target (if it bounces from here) would be 7630 max, since that's the top of the wedge and coincidentally also the downtrend line you can see in the chart in the comment above.
If the wedge breaks down here, then, as mentioned, projected target of the wedge is 7150.
If the wedge breaks down here, then, as mentioned, projected target of the wedge is 7150.
Comment:
We saw one more bounce from the wedge support as expected. The price was not able to break above 7600, and now it broke down from the wedge.
It will likely retest the wedge breakdown level, but I don't expect it to be able to reach above 7550 after this. If it does, then the wedge could be invalidated (unlikely at this moment)
Again, the target of the wedge is 7150.
It will likely retest the wedge breakdown level, but I don't expect it to be able to reach above 7550 after this. If it does, then the wedge could be invalidated (unlikely at this moment)
Again, the target of the wedge is 7150.
Comment:
The wedge is still in play, and this still looks like just a retest of the wedge breakdown level around 7530-7550. Not much volume on this candle (which is why it still looks like a retest which is usually followed by another drop).
But on larger time-frame (4h chart), this bounce is now forming a potential inverse Head & Shoulders bullish reversal pattern. It's still not completed and may not even be, but it's something that we have to consider.
The level to watch for wedge invalidation is if the price goes above 7550.
The level to watch for a confirmation of inverse H&S is a decisive break above 7630-7650.
In that case, we're back to bullish mode, and the projected target of the iH&S pattern (IF completed) is 8100-8120.
But on larger time-frame (4h chart), this bounce is now forming a potential inverse Head & Shoulders bullish reversal pattern. It's still not completed and may not even be, but it's something that we have to consider.
The level to watch for wedge invalidation is if the price goes above 7550.
The level to watch for a confirmation of inverse H&S is a decisive break above 7630-7650.
In that case, we're back to bullish mode, and the projected target of the iH&S pattern (IF completed) is 8100-8120.
Comment:
We now have a breakout with volume. The price broke out of the neckline, as well as the downtrend channel market with red line on the chart. The wedge is no longer valid, and the iH&S bullish pattern has been confirmed.
The bullish targets in the main chart are now active, with main target at 8100 (projected target of the iH&S).
The bullish targets in the main chart are now active, with main target at 8100 (projected target of the iH&S).
Comment:
A small pullback to around 7600-7610 wouldn't be surprising (it doesn't have to happen, but if it does, it will confirm the neckline as support, which is good for a bullish move, creates a constructive structure).
However, the price should not close below 7530 anymore, otherwise, it breaks the pattern.
However, the price should not close below 7530 anymore, otherwise, it breaks the pattern.
Comment:
If you click "play" on the chart above, you'll see how clearly the resistances turn into supports, as well as how precisely our take-profit targets were hit, as well as the pullback targets I mentioned above (7600-7610).
Is BTC price manipulated? Probably. But if you have properly defined resistance and support levels, then as you can see, you can orient yourself a lot better, and play along with the market makers to hit the tops and bottoms of a move (or know where to put a stop loss, because again, you have clearly defined key levels and turning points).
What someone calls a "manipulated pump" in that last candle, for us on this chart was a take-profit target which was hit to the dollar.
Is BTC price manipulated? Probably. But if you have properly defined resistance and support levels, then as you can see, you can orient yourself a lot better, and play along with the market makers to hit the tops and bottoms of a move (or know where to put a stop loss, because again, you have clearly defined key levels and turning points).
What someone calls a "manipulated pump" in that last candle, for us on this chart was a take-profit target which was hit to the dollar.
Comment:
This is unlikely to push higher to the next targets without a consolidation/retracement first. It will either go sideways for hours again, or retrace once more.
The short-term support is 7600.
And again, the price should not close below 7530 if this uptrend is to keep the power that drives it.
The short-term support is 7600.
And again, the price should not close below 7530 if this uptrend is to keep the power that drives it.
Comment:
There's only one thing that I really don't like about all of this.
We have inverse Head & Shoulders pattern indicating a local bottom. The price broke out of the neckline and confirmed it as support. So far so good.
However, a breakout of a pattern like this is always followed by an increase in volume during and after the breakout candle. We do not see that here. Which indicates lack of buyers followup, therefore lack of strength in this pattern.
The volume might still appear out of nowhere, but for now it does look suspicious.
My targets in the main chart are still active, but if we see the price close below 7530, then I'll take that as further confirmation of the pattern failure.
We have inverse Head & Shoulders pattern indicating a local bottom. The price broke out of the neckline and confirmed it as support. So far so good.
However, a breakout of a pattern like this is always followed by an increase in volume during and after the breakout candle. We do not see that here. Which indicates lack of buyers followup, therefore lack of strength in this pattern.
The volume might still appear out of nowhere, but for now it does look suspicious.
My targets in the main chart are still active, but if we see the price close below 7530, then I'll take that as further confirmation of the pattern failure.
Comment:
The volume (in the update above) gave us a clue about the power of this move. Furthermore, 7530 does not seem to be holding. If you read my previous updates, you know that this level was crucial for the iH&S pattern to hold its power. Since it's being broken now, the iH&S has no more power to push this to 8000-8100 area (even if we do get there by some magical move, that will not be due to iH&S anymore).
We might see a small dead-cat bounce from these levels, but I don't expect it to be able to break above 7630-7670 before another drop.
Whether the small bounce happens or not, this could go down to retest the 7320-7380 support area. As long as the price manages to stay above that level, it's neutral (not bullish anymore), and can still potentially turn around.
But if 7320 does not hold, this can quickly turn to bearish, and the retest of 7000s will be imminent.
We might see a small dead-cat bounce from these levels, but I don't expect it to be able to break above 7630-7670 before another drop.
Whether the small bounce happens or not, this could go down to retest the 7320-7380 support area. As long as the price manages to stay above that level, it's neutral (not bullish anymore), and can still potentially turn around.
But if 7320 does not hold, this can quickly turn to bearish, and the retest of 7000s will be imminent.
Comment:
The price did have a dead-cat bounce, but it couldn't even break above 7535.
The target of the rising wedge has now been reached.
It touched 7370, and coincidentally that's also the support zone I expected to be tested (7380-7320), as written in my update above.
The importance of this support area was already explained.
If it holds, we could see some rangy/choppy/sideways action for some time while the market decides the direction (above 7650 could turn bullish, below 7320 bearish).
If it breaks the 7320 level, next target will be in 7150-7100 area.
The target of the rising wedge has now been reached.
It touched 7370, and coincidentally that's also the support zone I expected to be tested (7380-7320), as written in my update above.
The importance of this support area was already explained.
If it holds, we could see some rangy/choppy/sideways action for some time while the market decides the direction (above 7650 could turn bullish, below 7320 bearish).
If it breaks the 7320 level, next target will be in 7150-7100 area.
Comment:
Since my last update, the 7320 support held, the price bounced from it, and this is the choppy/sideways/rangy movement I mentioned we're likely to see.
These kinds of moves are tough to trade (best to avoid them until the price decides where it wants to go and break either the support or the resistance mentioned above).
Or, if you're brave and you like trading choppy moves, be careful.
Try to enter only at the tops and bottoms of the range (avoid the middle unless you like gambling), take your profits as quickly as possible, and make your stop losses tight.
These kinds of moves are tough to trade (best to avoid them until the price decides where it wants to go and break either the support or the resistance mentioned above).
Or, if you're brave and you like trading choppy moves, be careful.
Try to enter only at the tops and bottoms of the range (avoid the middle unless you like gambling), take your profits as quickly as possible, and make your stop losses tight.
Comment:
The range has narrowed down. If we zoom out a bit, this is my current view.
The price is now moving in an uptrend channel. Furthermore, it has formed an ascending triangle, which has a bullish bias. If I were to see this kind of setup anywhere else, I'd say it's very bullish.
The only thing that's keeping me back from seeing this as 100% bullish is the fact that ascending triangles are continuation patterns and are more reliable when they form during an uptrend (where price has been moving up already before the triangle has formed, then consolidates inside a triangle, and breaks up). In our case here, we have an ascending triangle formation, but at the end of a downward move. They are not very reliable as a reversal pattern. That's the only reason I can't go full-on bullish mode yet, even though a break out to the upside is very possible and even probable, as long as the support line of the triangle is not broken. We should see a decisive move within 2 days.
To be clear, I give more odds to the bullish scenario here, but I can't be as confident in it as I was when I published the main chart above (and you saw the results).
A break of the 7780 will confirm the triangle breakout, and the bullish targets will be active.
7570-7600 is the short-term support for this move. If it breaks, the triangle loses its power.
7350 is still the crucial support holding this market. If that breaks, the bears will wake up.
The price is now moving in an uptrend channel. Furthermore, it has formed an ascending triangle, which has a bullish bias. If I were to see this kind of setup anywhere else, I'd say it's very bullish.
The only thing that's keeping me back from seeing this as 100% bullish is the fact that ascending triangles are continuation patterns and are more reliable when they form during an uptrend (where price has been moving up already before the triangle has formed, then consolidates inside a triangle, and breaks up). In our case here, we have an ascending triangle formation, but at the end of a downward move. They are not very reliable as a reversal pattern. That's the only reason I can't go full-on bullish mode yet, even though a break out to the upside is very possible and even probable, as long as the support line of the triangle is not broken. We should see a decisive move within 2 days.
To be clear, I give more odds to the bullish scenario here, but I can't be as confident in it as I was when I published the main chart above (and you saw the results).
A break of the 7780 will confirm the triangle breakout, and the bullish targets will be active.
7570-7600 is the short-term support for this move. If it breaks, the triangle loses its power.
7350 is still the crucial support holding this market. If that breaks, the bears will wake up.
Comment:
Touched 7600 precisely. So far this is all expected and perfectly fits the scenario.
We should see this triangle break out to the upside (or get invalidated if it doesn't break out) sometimes today or max within 28 hours.
We should see this triangle break out to the upside (or get invalidated if it doesn't break out) sometimes today or max within 28 hours.
Comment:
Although the price dipped below 7570-7600 zone which I wrote previously about as a support zone for this triangle, I don't see a real dump happening to indicate a breakdown of the support (yet). It could still happen, but this, in my book, did not break it still. We're likely to see a small bounce, the price will retest the 7600-7610 area. How it behaves there should give us more clues. If it can't break that and go further up, then it's likely we'll see a real, stronger drop to the next support. But for now, I don't see this going below 7540-7500 area in the next 4 hours at least.
Comment:
The triangle is still very much in play. This is the bounce I mentioned is likely to happen. The volume on this candle looks good as well.
Let's see how it behaves at the next resistance around 7670-7700.
Let's see how it behaves at the next resistance around 7670-7700.
I still give more odds that we see a pullback, even a fast one, before an actual breakout above 7600.