Hi,
In this pretty quiet time, I would like to give an overview of what does I see and what I expect from the market.
This week we got a pretty nice pump upwards from the slightly expected area. As always we needed confirmation, we got it (Morning Star candlestick pattern on 4H) and 10% was pretty easily doable.
Now before Christmas, I would like to give a slight overview of the current situation on the market using a Daily timeframe.
Good indications for further short-, mid-term growth.
This week bounce was quite intensive, the previously worked support level held the price and the pump started from $6,500. The Daily candle close was above the round number $7,000 and it formed a bullish candlestick pattern called bullish Engulfing. Daily timeframe candlestick patterns are usually very powerful, plus the Engulfing itself is pretty powerful. Let's make this post a bit educational - do not search super confirmations from shorter timeframe candlestick patterns, they don't work as they work on 4H or Daily. Yes, sometimes I look 15 min chart when I know exactly that area from where it may turn around (waiting for confirmation form rejection candle) but usually, I work and I trust(!) bigger timeframe patterns.
So, we got bullish Engulfing from previously worked support level and we had also an RSI Divergence which confirms that the bounce was technically good.
A possible "Double Bottom" and the key area.
The rejection upwards from the previously worked support level allows predicting that in the future we may see a "Double Bottom" chart pattern which guides the price into the higher levels. You ask for: "Allows to predict? We have already a Double Bottom!"...and my answer is - almost all chart patterns are valid when they have a confirmed breakout. Triangles - the price has to close outside the triangle to be valid, Head and Shoulders - the price has to close below the neckline and etc. Now the "Double Bottom" - the double bottom is valid when you have seen a candle close above the "neckline". At the moment, the neckline is slightly below the magic number of $8,000. If the Daily candle got a close above the blue horizontal line then the Double Bottom chart pattern is valid and we may see continuation moves upwards and this is the key level.
This price level, ~$8,000, has worked several times as strong support or resistance level and now it has a new task - to be a neckline :) There are Daily EMA's which also should act as resistance levels, so it is pretty heavy resistance and very strong area to make a breakout upwards.
Possible scenarios
Considering my analysis above of the rejection from the bottom which ended up with a bullish candlestick pattern "Bullish Engulfing", I assume that those criteria will push the price to the key area! So, from $7,000 to $8,000 is doable. This is not the signal, this is more a prediction, personally I watch it from the side (because the Engulfing momentum starts to become an end) but you never know, maybe I see something within a few hours (we have some Inside Bars candlestick patterns on the Daily timeframe) and I will be in the market but in general, my first prediction is that the price goes to the key area around $8,000.
As said, this level looks super-strong and from there it all depends on the market demand. We know that the selling pressure is high, plus we have daily EMA Death Cross between 100&200 (confirms selling pressure), which all may indicate that the downtrend may continue from there BUT if there is enough buying power to crack this strong level and if the Double Bottom starts to work for our favor then we might see pretty high price levels over quite a long time. Double Bottom chart pattern target shows that the price may reach (after the breakout from the neckline) to the $9,200-9300 but the road to the mentioned area isn't easy, different trendlines, strong horizontal levels and etc., starts to harden the movement to the higher prices.
Summary: I like the Daily bullish Engulfing formed a few days ago. It allows predicting that the price may reach the key area which is around $8,000 but it has to go there within a few days, otherways the Engulfing momentum will be gone! From there, it all depends on how it reacts: does it make a breakout, if it makes it then which is the candle, is it strong and powerful or is it just small ones and etc.
Happy holidays and hopefully, you have learned from my posts and hopefully, it was also great reading.
Do your own research and please, take a second and support my effort by hitting the "LIKE" button, it is my only FEE from You!
Best regards,
Vaido
In this pretty quiet time, I would like to give an overview of what does I see and what I expect from the market.
This week we got a pretty nice pump upwards from the slightly expected area. As always we needed confirmation, we got it (Morning Star candlestick pattern on 4H) and 10% was pretty easily doable.
Now before Christmas, I would like to give a slight overview of the current situation on the market using a Daily timeframe.
Good indications for further short-, mid-term growth.
This week bounce was quite intensive, the previously worked support level held the price and the pump started from $6,500. The Daily candle close was above the round number $7,000 and it formed a bullish candlestick pattern called bullish Engulfing. Daily timeframe candlestick patterns are usually very powerful, plus the Engulfing itself is pretty powerful. Let's make this post a bit educational - do not search super confirmations from shorter timeframe candlestick patterns, they don't work as they work on 4H or Daily. Yes, sometimes I look 15 min chart when I know exactly that area from where it may turn around (waiting for confirmation form rejection candle) but usually, I work and I trust(!) bigger timeframe patterns.
So, we got bullish Engulfing from previously worked support level and we had also an RSI Divergence which confirms that the bounce was technically good.
A possible "Double Bottom" and the key area.
The rejection upwards from the previously worked support level allows predicting that in the future we may see a "Double Bottom" chart pattern which guides the price into the higher levels. You ask for: "Allows to predict? We have already a Double Bottom!"...and my answer is - almost all chart patterns are valid when they have a confirmed breakout. Triangles - the price has to close outside the triangle to be valid, Head and Shoulders - the price has to close below the neckline and etc. Now the "Double Bottom" - the double bottom is valid when you have seen a candle close above the "neckline". At the moment, the neckline is slightly below the magic number of $8,000. If the Daily candle got a close above the blue horizontal line then the Double Bottom chart pattern is valid and we may see continuation moves upwards and this is the key level.
This price level, ~$8,000, has worked several times as strong support or resistance level and now it has a new task - to be a neckline :) There are Daily EMA's which also should act as resistance levels, so it is pretty heavy resistance and very strong area to make a breakout upwards.
Possible scenarios
Considering my analysis above of the rejection from the bottom which ended up with a bullish candlestick pattern "Bullish Engulfing", I assume that those criteria will push the price to the key area! So, from $7,000 to $8,000 is doable. This is not the signal, this is more a prediction, personally I watch it from the side (because the Engulfing momentum starts to become an end) but you never know, maybe I see something within a few hours (we have some Inside Bars candlestick patterns on the Daily timeframe) and I will be in the market but in general, my first prediction is that the price goes to the key area around $8,000.
As said, this level looks super-strong and from there it all depends on the market demand. We know that the selling pressure is high, plus we have daily EMA Death Cross between 100&200 (confirms selling pressure), which all may indicate that the downtrend may continue from there BUT if there is enough buying power to crack this strong level and if the Double Bottom starts to work for our favor then we might see pretty high price levels over quite a long time. Double Bottom chart pattern target shows that the price may reach (after the breakout from the neckline) to the $9,200-9300 but the road to the mentioned area isn't easy, different trendlines, strong horizontal levels and etc., starts to harden the movement to the higher prices.
Summary: I like the Daily bullish Engulfing formed a few days ago. It allows predicting that the price may reach the key area which is around $8,000 but it has to go there within a few days, otherways the Engulfing momentum will be gone! From there, it all depends on how it reacts: does it make a breakout, if it makes it then which is the candle, is it strong and powerful or is it just small ones and etc.
Happy holidays and hopefully, you have learned from my posts and hopefully, it was also great reading.
Do your own research and please, take a second and support my effort by hitting the "LIKE" button, it is my only FEE from You!
Best regards,
Vaido
As said in this post: "From there (around $8,000), it all depends on how it reacts".
Looks like it has started to approach 8k, here might be a one possible short-term and a quick scenario:
Regards,
Vaido