In my last analysis, I showed how Bitcoin has the potential to break out to the 61.8% pull back level that we've seen it do time and time again.
If you haven't had a chance to read that analysis, check it out here:
In this analysis, I am seeing an exact mirror image flip set-up of the descending traingle at the $6,000 support level from 2018.
In this case, we've got an ascending triangle, which are typically bullish patterns.
Something to watch out for though is a 'long' leverage liquidity grab where they stop hunt long traders.
We saw this exact same move at the $6,000 level before the big move down where a majority of short traders were liquidated out of their positions.
We also hit a 261.8% extension from the swing low and swing high before the break down move which has given us the support at $3400 and is typically a strong reversal point on downward moves for Bitcoin.
If the structure doesn't break down and close below the triangle on the daily chart, we could still see a target at the $5380 level. I used the exact same candlestick set-up from the break down to give an idea of what this might look like (including a stop hunt and liquidity grab for longs.)
Getting some cheeky buy orders at that $3450-$3500 zone may be a savage tactic in case we do get that wick down.
Invalidation of this structure would be a break and close below the triangle support on the daily chart.
Full trade set-up looks like this as well as a potential long buy if we do get that break down wick.
What do you guys think? Are we going to continue following this out until May before we get a break out, or do you see something else in the cards?
1. The 'Short liquidity' gap is not correct in that sense: It was caused by Bitfinex due to the 'bank-run', people panicked back then that they won't be able to withdraw their fiat funds, exchanging their holdings to crypto like BTC & rushing out of Bitfinex, which led to this huge spike. We didn't have this on other exchanges to that degree breaking weekly LHs.
2. The pattern: You could argue the psychology of ascending triangle, but you know that usually it's a trend continuation pattern: We don't have that right now. Also I dislike the fact that we've been going up since the current HL at 3400 (Bitfinex): If we top out here now at 4k psychological, this will give us a pretty strong hidden bearish divergence on the weekly.
=> Even if we break bullish the 4,2k, I would rather first see a consolidation/move down, form a HL, and then get the break-out. => The more touches you have on an ascending triangle, the weaker it gets. Currently we have barely touched it a second time, immediately building a shooting star & shooting down ;)
I was mostly leaning bearish with a continuation triangle to the downside, but so far we're seeing strong reactions from the bulls. You can hedge short on a future contract at the $4000 levels if you think it's going to move lower and buy spot on the rising support line.
Lots of ways to play it, but right now, the only thing that matters is a break out or a berak down in either direction.
You can call it whatever you want but the fundamentals usually line up with the technicals. We saw that 'fundamental' event go up and tag the 61.8% retracement level of the bear market low to the all time high to within $50.
If you want to play the game, you have to follow what the big money do and hunt for clues on where they'll try and hunt you out of a trade.
Edgy_
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@jacobcanfield, you know the biggest problem I see with those trendlines is always (esp. in crypto space): they're sloppy, we can always break the trendline and stay inside the price equilibirum range, that's way I barely play based on those. I prefer to play off S/R zones much more.
I personally barely play Bitcoin, I guess the last time was in July on that huge inverse H&S break: I rather play high beta versions of BTC like EOS in the case of a bull break: The recent equilibrium break of EOS at $3 psychological was just amazing, we touched the previous weekly support at 4,5 with almost 50% follow-through. This is beautiful & textbook TA.
In the case of a bear break/further consolidation of the sector, I'm gonna watch XRP closely like I told you -amazing downside potential if we loose the 30 cent psychological. => The trendline over there is holding up pretty good.
But anyways, said this before & will say again: So happy to have someone here who is at least aware of the technicals of patterns & stuff like risk management, compared to the other Moonboys. This is awesome for idea exchange on a knowledgeable level. Greets buddy! ;)
jacobcanfield
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@Edgy_, I'm much more a fan of horizontal S/R structures with the (daily, weekly, monthly and yearly opens and closes) but a trendline is a trendline whether it's dynamic or static.
You can draw this one in a few different ways, but I take the approach of wanting as many touches along it as possible and I don't use 'lines' more so 'ranges' from wick to body to give me an idea of where to long and short.
Of course I'm looking at a bear scenario as well and the only thing we can wait for is a break on either side with a candle closing.
Thanks for reading and engaging in a dialogue rather than just trolling.
Haha on XRP... I am actually in a long on the XRPH19 on the Bitmex chart from 8000 sats.
Edgy_
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@jacobcanfield, Sure buddy, you're welcome. I think this is the real intention of TradingView for the comments section, but as I can see under my own posts too, it gets misused for 3rd party analyses, in some cases even where the ticker has nothing to do with the current analysis. => Never understood that. If I'm gonna give you real feedback & value, instead of blurting out my own content, people will see my analysis anyways if they find my comments helpful you know ...this way both of us are winning, since you also get more traction & reputation through more real & meaningful comments. ;)
About trendlines: No I agree that you should get as many touches as possible, definitely. In the stock market with bigger names, it's sooo much easier to trade pattern break-outs, since the trendlines get respected much more -that's what I'm missing in crypto space, esp. with all those fake-outs.
Having said that: The lower trendline on XRP in that descending pattern gets amazingly respected on the Daily currently. Just have a look at the touches: How many times we're touching the bottom vs. how many times the 'potential' top. That's what I meant the other day when I said it's relatively weak: It get's dragged higher by correlation to other sector leaders, esp. BTC & LTC currently. So yeah ..would definitely look at other candidates to play bull, but in case of a bear-break, this will be huuuuge. The trendline break will be the first signal, the 30 psychological the second. Not sure though if XRP or EOS will make more to the downside. Don't forget XRP never broke its summer lows compared to the other major names last November, that's why I hope for a bigger move in the bearish scenario. Also, we could first reach the 28,5 support, and consolidate for a while, before we break to 25: we had exactly that scenario during the summer dump with a slightly upward tilted trendline: first a break to 44,5 previous swing lows, a few days of consolidation, then the dump to 25 cents.
AliShirali
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Thanks.very good analyz.but I still think there may be another down run and this bulls is all trap
jacobcanfield
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@AliShirali, It very well could be. Watch for the invalidation with a break down from the support level then. ;)
surangadesilva
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@AliShirali, 100% Agree bro. I see most of the long calls here in TV is who actively working for the cartel...
This is what happen in the past from here onwards...
2011 - 66% Drop / 29 Days
2014 - 65% Drop / 62 Days
2018 - 65.5% Avg Drop = 1450
surangadesilva
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@surangadesilva, Please note that the comment that I made before: "I see most of the long calls here in TV is who actively working for the cartel..." is not specifically for this analyst. In general most of the long calls are unreal and not practical. Better to follow pro analysts in twitter who have track record with proof. Please note that PROOF is very important
I know few pro analyst in twitter who predicted 3k last year before we went down from 6k and almost everyone in TV saw going up from 6k and few saw 5k or 4k but not 3k. Even the guy I found in TV who predicted 3k seems like working for the cartel... LOL
Mo6e
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@surangadesilva, to me the best comparative analysis is the 2011, almost the same % moves. I don't know why everyone is looking at 13' 14' and 15'. And another thing that I am preparing myself is a long, very long flat prob almost the whole 2020. This thing will not move until only the voluntary developers remain a.k.a. return to mean.
1. The 'Short liquidity' gap is not correct in that sense: It was caused by Bitfinex due to the 'bank-run', people panicked back then that they won't be able to withdraw their fiat funds, exchanging their holdings to crypto like BTC & rushing out of Bitfinex, which led to this huge spike. We didn't have this on other exchanges to that degree breaking weekly LHs.
2. The pattern: You could argue the psychology of ascending triangle, but you know that usually it's a trend continuation pattern: We don't have that right now. Also I dislike the fact that we've been going up since the current HL at 3400 (Bitfinex): If we top out here now at 4k psychological, this will give us a pretty strong hidden bearish divergence on the weekly.
=> Even if we break bullish the 4,2k, I would rather first see a consolidation/move down, form a HL, and then get the break-out. => The more touches you have on an ascending triangle, the weaker it gets. Currently we have barely touched it a second time, immediately building a shooting star & shooting down ;)