Potential Bottom established for Bitcoin, 1st Target at $7,500
Hello everyone, it’s been some time since my last Bitcoin update so let’s get into it.
As many of you know, I have had a very bearish outlook on Bitcoin for the last few months and that hasn’t changed. However I believe we will see some short/med term upside before continuing to fall.
There could be a case to argue that Bitcoin is forming a new bottom here. The price hit a low of 6,100 which is right in line with a very strong support area in which we saw the price bounce back up in early February, and in early April as well.
When looking at the daily view, a support trend line can be drawn at the bottom of the candle bodies of the February and April low points.
When this trend line is drawn across, we see that the price just recently touched this trend line and bounced up from the 6,100.
We can also see that the S1 trend line provided support and stopped any further downside. This trend line was broken in April after containing the price since December, and this drop could be seen as a re-test of this support line.
Looking at indicators, we see on the daily view the CMF is showing a bullish divergence. On the 1 hour time frame we see a bullish divergence on RSI and CMF.
The 50MA (in green) was also just broken, indicating at least some short-term upside.
I have a feeling this bottom will play out similar to how it played out back in early April, where we will see consolidation that will last a few days with spikes up and down before finally breaking out.
The Fibonacci Retracement has been drawn from 19.8k (All-time High) down to $0.00. If we continue to climb from here my first target is at $7,500 where there is a confluence of the 0.618 fibonacci and the R2 trend line.
The R2 trend line is a new resistance line drawn from the ATH down to 10k and beyond. And from the looks of it, this seems to be where the 50MA (in green) will also line up to form additional confluence.
If the R2 trend line and 0.618 fib breaks, I’ll be looking towards the R1 trend line for a reversal. For now I am going long with a stop loss just below these support trend lines.
Thanks for taking the time to read my analysis. Please hit the like button if you find this useful!
Trend line Key
R1 = Resistance trend line formed from 13k to 11.7k to 10k.
R2 = Resistance trend line formed from 19.8k (ATH) to 10k
S1 = Support trend line formed from 19.8k to 17k to 11.7k. This was previously a strong resistance trend line that was broken back in April and appears to have just recently been re-tested as support.
S2 = Support trend line formed at the bottom of the daily candle bodies from early February and early April. It looks like the price has just found this support once again.
As many of you know, I have had a very bearish outlook on Bitcoin for the last few months and that hasn’t changed. However I believe we will see some short/med term upside before continuing to fall.
There could be a case to argue that Bitcoin is forming a new bottom here. The price hit a low of 6,100 which is right in line with a very strong support area in which we saw the price bounce back up in early February, and in early April as well.
When looking at the daily view, a support trend line can be drawn at the bottom of the candle bodies of the February and April low points.
When this trend line is drawn across, we see that the price just recently touched this trend line and bounced up from the 6,100.
We can also see that the S1 trend line provided support and stopped any further downside. This trend line was broken in April after containing the price since December, and this drop could be seen as a re-test of this support line.
Looking at indicators, we see on the daily view the CMF is showing a bullish divergence. On the 1 hour time frame we see a bullish divergence on RSI and CMF.
The 50MA (in green) was also just broken, indicating at least some short-term upside.
I have a feeling this bottom will play out similar to how it played out back in early April, where we will see consolidation that will last a few days with spikes up and down before finally breaking out.
The Fibonacci Retracement has been drawn from 19.8k (All-time High) down to $0.00. If we continue to climb from here my first target is at $7,500 where there is a confluence of the 0.618 fibonacci and the R2 trend line.
The R2 trend line is a new resistance line drawn from the ATH down to 10k and beyond. And from the looks of it, this seems to be where the 50MA (in green) will also line up to form additional confluence.
If the R2 trend line and 0.618 fib breaks, I’ll be looking towards the R1 trend line for a reversal. For now I am going long with a stop loss just below these support trend lines.
Thanks for taking the time to read my analysis. Please hit the like button if you find this useful!
Trend line Key
R1 = Resistance trend line formed from 13k to 11.7k to 10k.
R2 = Resistance trend line formed from 19.8k (ATH) to 10k
S1 = Support trend line formed from 19.8k to 17k to 11.7k. This was previously a strong resistance trend line that was broken back in April and appears to have just recently been re-tested as support.
S2 = Support trend line formed at the bottom of the daily candle bodies from early February and early April. It looks like the price has just found this support once again.
Comment:
Looks like we are about to break out here. There is a bullish crossover about to occur with the 50MA and 200MA. First minor resistance is above at .236 fib level (about $7000) if we can get past 6,800.
Order cancelled:
Unfortunately we did not get the bullish move up that I predicted. Every bounce only climbs about $400-500 at a very slow pace before dropping like a rock again. As you know I have been bearish for months and I was still expecting further downside, I just thought we would at least see some sort of move up before falling again. The market is extremely weak right now, so I think we will get down to the 4k range very soon. I will have a new analysis soon!
Trade active:
Now that the market is showing some signs of reversal, I decided to re-open this trade idea. I believe the bottom is in for now, and there is a very strong chance we get up to $7,500 by the 0.618 fib retrace on my original prediction above. Sometimes I miss the exact bottom and I really thought it was a sign of further downside to come, but now I believe we will start a relief rally before dropping further. My overall long term picture is still calling for a drop to the 4k range, however this won't happen until after we witness a relief rally over the next few weeks
Now let's see if the bulls can continue this movement up, the first minor resistance will be at 7k. I'm still keeping my target of 7.5k as the first target, and I think we will get there by the end of this month. But let's be patient and keep an eye on this move up. Hopefully this doesn't turn into a bart pattern and fall right back down....