Welcome to another episode of our favourite show - bitcoin brought to you by FELIX!
I have been heavily concentrating on XBT price action as of late due to the bearish nature of the market. But, I think its time that we took a good look at the bullish price leader (BTC) FINEX!
So what has occurred since our last breakdown ? On the 11th of December I stated in a intra-day breakdown that FINEX will test 3650$ and see a rejection from this level in accordance with our BITMEX analysis, which can also be found on our TradingView page. We saw support average at 3323$ and our indicated zones on RSI/ROC and RSI standalone were used as support in line with our bitmex analysis (remember they follow each other). Now we will take a deeper look at the next move we can expect!
WHAT CAN BE SEEN ON THE 4 HOURLY CHARTS FOR BTC ? - We can see that since the 43 level on RSI/ROC was used as support at just below 3323$ (our pre-outlined support zone) in line with the black line on RSI/ROC, which we stated was a zone of bullish tendency, BTC had bullish activity to just below 3650$ ceiling. Remember, I had posted LONG XBT analysis at 3150$ and stated that for BITMEX our target would only be to 3427$. - We can see that since 3650$ ceiling was tested, BTC is looking oversold on the 4 hourly charts on both momentum indicators. Lets firstly take a look at the RSI momentum indicator. We can see that the infamous short level of 82 on this indicator was achieved - historically, BTC has a tendency to collapse from this zone as it often runs out of bullish momentum driven by finex. We can also see from looking at our RSI/ROC indicator that the 65 level on this indicator has currently been achieved and I expect further down action till the 53 level on the 4 hourly charts on this indicator before any bullish momentum comes back into BTC. - None the less, on the 4 hourly charts, we can see main BEARISH RED TREND LINE on price chart is showing us that BTC has maximum upward movement till 3850-800$ for this intra-day move and in order to achieve this price level without exhausting bullish momentum, then we will have to see a spike down to previous support levels at 3400$ and in line with this MEX as stated in our most recent breakdown should see a drop to 3250$ support zone aswell.
WHAT CAN BE SEEN ON THE 1 HOURLY CHARTS FOR BTC ? - We can see that again BTC is on its last knees of bullish momentum and we are currently maintaining price above 3480$ support quite artificially judging by our momentum indicators. We can not rule out a retest of 3650$ ceiling before the bulls realise they just can’t break this level without gaining further bullish momentum at one of our downward targets. - We can see that previous price ceiling before this breakout was at 3380$ and a retest of this zone could be quite evident in finding support towards our upward targets of 3800$ before a final break to the downside (our medium term perspective is still very very bearish). - We can also see that EMA 200 is currently at just below 3450$, thus on our way down to 3380$, our main zone of bullish confluence will be in line with EMA support at 3450$. Thus we can deduce our bearish targets for this move to be 3450$,3400$ and as low as 3380-50$ before any solid bullish momentum is found like we did at 3320$ previously. This also stays in line with the idea of higher lows being formed to maintain bullish momentum and not let bears take over just yet before 3800$ is reached on FINEX. - I expect a drop to come from current region on RSI/ROC to 53 level where we will once again line up with black trend line of bullish support on this momentum indicator - this is where we should be thinking to go long again.
WHAT CAN BE SEEN ON THE DAILY CHARTS FOR BTC ? - On the daily charts for BTC we can see that the BLACK trend line on price chart has consistently been support for bitcoin for a very long time and the other descending black lines on price chart have been consistent resistance with the RED trend line on price chart being the most intra-day/immediate trend line. There seems to be somewhat of a larger wedge forming at current price levels, thus a break of our CLEAR resistance zone of 3800$ will lead to us evaluating bullish activity to the upside move - at least to 4150$ (weekly EMA 200 is currently at 4100$ and this level will be difficult to break) and also, 4435$. - This is not to suggest BTC will not follow our plan of a intra-day rejection from 3650$ to 3380$ before finding support at 3380$ and having another crack at 3800$. ITS JUST TO SAY WHAT IF/ WHAT WILL HAPPEN IF 3800$ IS BROKEN. - Indicators such as RSI/ROC showing slight bullish tendencies on the daily with main resistance at 65 level on the daily since we have used initial 56 level resistance on RSI/ROC as support. Again, evidence of bullish activity to 3800$ being validated but again as ive stated, this is not physically possible without a drop to reset smaller time frames to bullish zones of tendency.
All in all, we can deduce that we should expect 3650$ ceiling to hold given a bearish price leader drop from MEX at 3427$ and once this occurs this should drive prices on FINEX down to lows of 3380$ and MEX should be at 3250$ before we see support to 3610$ for MEX and 3800$ for FINEX.
REMEMBER, WE ARE STILL BEARISH IN THE LONG RUN WITH DOWN WARD TARGETS TO LOWS OF 1750$ BEFORE BTC FINDS ANY MAJOR REAL SUPPORT TO DRIVE IT INTO A BULL RUN!
PLEASE SEE RELATED IDEAS DOWN BELOW ;) & don't forget to stay up to date with our calls by following our Instagram and telegram channels down below AND ON OUR TRADINGVIEW PAGE!