Looking at logarithmic gives us an insightful view of what is going on.
What did happen on 17th December of 2017? Bitcoin reached its new ATH at $19891. The same week was estimated the biggest volume since June of 2016. Theory says that only huge volume ( in most cases the biggest one throughout the whole trend ) is capable of turning around any trend. Of course it works only in hindsight but probability of such turn of events was quite high. Anyway, let's move on.
What did happen on 11th February of 2018? After 7 weeks of downtrend BTC makes rapid move down and achieves $6000 level which is bought out very quickly and our weekly candle formes a pretty "hammer". It was actually a very important week/day because of four reasons but before we adavence into that let's draw on of the most "magical" things in TA - Fibonacci levels.
The logarithmic view shows us a clear picture of where is the trend's beggining and where is its end. Evidently that Bitcoin begun to rise from $221 mark so it is not a problem to draw a propriate Fibonacci retracement levels as the end ot this move is as much evident as its beggining. The main number here is the Golden Ratio or 0.618. The same "smart" books say that corrections are keen to happen untill that level is achieved and believe me it works most of the time. If 0.618 level is broken it means the trend is broken and it is not a correction anymore. It happened to be that our 0.618 level lays on $7500 mark.
So let's come back to 11th February of 2018. Though Bitcoin dipped below that level weekly candle hadn't been closed there and that week closed its candle at $8020 mark with the followed journey to $11900 (which, by the way, is another Fibonacci level AND also is on the too obvious for everyone resistance line B).
The next reason why this candle is so appealing is because of its volume. Do you remember that part about volume and trend-turning things? Here it is even more exemplary. The biggest volume since late 2015. And it is in a falling, almost crashing market.
The third reason is so hateful by many a support line. We can't call everything a support line but if it have served as a support line three or more times then it more probably than not it is a support line. The price did excatly that with the support line A. First in late March of 2017, the second time in July and the third in February 2018.
The fourth reason is the next: Stoch RSI became oversold as it hadn't been since
June of 2016. In such conditions it is hard enough for bears to push the price down.
So what is happening now? Now is the most interesting situation of them all. Currently the price stands on a) 0.618 Fib Level b) the support line A c) the Weekly Exponential Moving Average 50.
What will continue the downtrend? Closing of weekly candle below $7500 mark. Why? Because the support line will be broken, the 0.618 Fib level will be broken and EMA 50 will be broken ( and our hearts too). So what then? Then we have only two price targets - $4320-$4800 which is 0.786 Fib Retracement and coincidies with the previous "ATH" after which the market fell by 40% AND coincidies with Trend-Based Fib Extension 4.618 level of the previous bull-run and crash in 2014-2015 AND with the upper trend line D of the previous channel.
If $4500 level will be broken too then say hello to our old support line C and our good old "healthy" channel which we left in May of 2017. According to that channel the "true" price of BTC should be around $3000.
What will confirm the uptrend?
Breaking the resistance line B what will mean breaking the 0.5 Fib level too and staying there for a while with retesting that level in a perfect case.
What did happen on 17th December of 2017? Bitcoin reached its new ATH at $19891. The same week was estimated the biggest volume since June of 2016. Theory says that only huge volume ( in most cases the biggest one throughout the whole trend ) is capable of turning around any trend. Of course it works only in hindsight but probability of such turn of events was quite high. Anyway, let's move on.
What did happen on 11th February of 2018? After 7 weeks of downtrend BTC makes rapid move down and achieves $6000 level which is bought out very quickly and our weekly candle formes a pretty "hammer". It was actually a very important week/day because of four reasons but before we adavence into that let's draw on of the most "magical" things in TA - Fibonacci levels.
The logarithmic view shows us a clear picture of where is the trend's beggining and where is its end. Evidently that Bitcoin begun to rise from $221 mark so it is not a problem to draw a propriate Fibonacci retracement levels as the end ot this move is as much evident as its beggining. The main number here is the Golden Ratio or 0.618. The same "smart" books say that corrections are keen to happen untill that level is achieved and believe me it works most of the time. If 0.618 level is broken it means the trend is broken and it is not a correction anymore. It happened to be that our 0.618 level lays on $7500 mark.
So let's come back to 11th February of 2018. Though Bitcoin dipped below that level weekly candle hadn't been closed there and that week closed its candle at $8020 mark with the followed journey to $11900 (which, by the way, is another Fibonacci level AND also is on the too obvious for everyone resistance line B).
The next reason why this candle is so appealing is because of its volume. Do you remember that part about volume and trend-turning things? Here it is even more exemplary. The biggest volume since late 2015. And it is in a falling, almost crashing market.
The third reason is so hateful by many a support line. We can't call everything a support line but if it have served as a support line three or more times then it more probably than not it is a support line. The price did excatly that with the support line A. First in late March of 2017, the second time in July and the third in February 2018.
The fourth reason is the next: Stoch RSI became oversold as it hadn't been since
June of 2016. In such conditions it is hard enough for bears to push the price down.
So what is happening now? Now is the most interesting situation of them all. Currently the price stands on a) 0.618 Fib Level b) the support line A c) the Weekly Exponential Moving Average 50.
What will continue the downtrend? Closing of weekly candle below $7500 mark. Why? Because the support line will be broken, the 0.618 Fib level will be broken and EMA 50 will be broken ( and our hearts too). So what then? Then we have only two price targets - $4320-$4800 which is 0.786 Fib Retracement and coincidies with the previous "ATH" after which the market fell by 40% AND coincidies with Trend-Based Fib Extension 4.618 level of the previous bull-run and crash in 2014-2015 AND with the upper trend line D of the previous channel.
If $4500 level will be broken too then say hello to our old support line C and our good old "healthy" channel which we left in May of 2017. According to that channel the "true" price of BTC should be around $3000.
What will confirm the uptrend?
Breaking the resistance line B what will mean breaking the 0.5 Fib level too and staying there for a while with retesting that level in a perfect case.
Comment:
My thoughts are the next: since April of 2017 we perphaps entered the bubble phase when left already on its own not quite healthy uptrend channel CD. So the price "needs" to come back there. There is other scenario where we reach our good old channel CD by just going sideways. Then we can expect 4500$ by 2019 in any case of further healthy grow.
Comment:
We broke our support line A and 0.618 Fib Level. The next stop is 0.786 Fib($4320).