Hi friends! Welcome to this update analysis on Bitcoin! Let's get right to it! Looking at the four hour chart, we can see that Bitcoin has broken the primary uptrend that it was in, and has rolled over at the 61.8% retrace (grey horizontal trendline.) Now, price is falling back toward the support that it originally held after the rally, which is the light blue moving average. Looking at the four hour MACD, we can see that it has been steadily forming a bearish divergence, as price was trending higher. Furthermore, on the weekly RSI, BTC is severely overbought. So, there is an increasing amount of technical data that suggests that the upside is very limited, if there is any upside left at all (in the short term.)
After assessing all of these factors, I think it is likely that price will fall to the light blue moving average. From there, I think we could see a bounce, which could then form a head and shoulders pattern here on the four hour chart. Since there is currently not enough data to see if a head and shoulders will develop, that's more of a technical guess as to how the downside movement could develop. Ultimately, I do believe that we will head lower. We may still get another push higher, but I think that is very unlikely at this point. In fact, I sold all of my BTC on the 8th, with the belief that I will be able to buy at lower prices from here.
So, yes, I think that we will break down possibly in a head and shoulders on the four hour. You can see that the purple moving average is just below. That is the daily 200 EMA, which is the 1200 EMA on the four hour chart. I have drawn a rough sketch (dashes) of where the 200 and 50 EMAs will be in the near future, and I do expect price to return to the 200 EMA at a bare minimum. That is currently around 4650-4700. Personally, I believe that BTC will fall even lower than that, possibly into the high 3000s.
In addition to all of that, we can see that the MACD is beginning a new expansion to the downside, and it is about to cross the zero line, which is a technical sell signal. With so much data pointing to exhaustion, I will remain on the sidelines, until it is safe to reenter my position.
On a side note, we never physically came into contact with the overhead resistance zone, but BTC got pretty close. I am expecting a pullback now, but I believe that we will return to test that level in the not too distant future.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
Thanks for the analysis.
You wrote in your analysis: "I think price will shoot up toward the major overhead resistance zone . That's where I think we will run into a wall."
with that thinking how did you sell all your bitcoins on the 8th?
streetgainer
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@Mohandes, It's called hindsight trading. Haven't you ever heard of it?
rsansbury
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@Mohandes, this is what bothers me with some of these "analyses". Strong, strong rhetoric in the last update that 5700 was the first point of resistance. I realize it is TA and TA is at best an educated guess and oftimes particular targets can be missed, over or under. But when I read in the next update that "I sold all my BTC on the 8th", it just chaps my hide. Thanks Magic for waiting until after the downturn to inform your devoted followers.
Taiwan_Bear
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@rsansbury, Well, 99% of traders don't know what TA is and how to apply TA, not because of TA is at best an educated guess.
Also, those top traders are usually the ones who hindsight trading. One who you could follow is @HamadaMark who provides accurate and consistent TA with exact buy-ins and stop-loss.
Unless you are a day trader, one will not sold all his/her positions. Instead, he/she would sell some (even if 90%) instead of 100% of their positions, and use those profits to buy lower.
rsansbury
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@Taiwan_Bear, thanks for the suggestion. I’ll check out the site.
@streetgainer, Poop has been a pretty interesting read for me for a long while now as he is a TA master. I get it that TA cannot give us the exact points where to cycle a trade. But I guess I’m just tired of the attitude this guy displays, giving us both sides of the coin and then constantly bragging he was right. But when I read he had not followed his own advice and sold while I’m sitting around waiting for one last surge, well, that was the straw that will send me looking for a better advisor. Good luck with your trades.
MagicPoopCannon
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@Mohandes, because I don't just make an analysis one day, and then do nothing as the market moves. My analysis of the market is constantly evolving. I saw that we got close to it, but many major indicators now point to exhaustion, which I couldn't see at that time. Things like that change my opinion, and what I do with my trades. If I just ignored how the market evolved, that would be pretty foolish.
Mohandes
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@MagicPoopCannon, I understand were are you coming from, but because you haven't published any analysis after the last one that you have claimed it is more likely to surge before pullback, claiming that you have sold your Bitcoins looks more like after fact than based on analysis. Some people might even doubt that you have actually sold all your Bitcoins or had some.
Whatever it is, now everyone knows that you are out and waiting for the pull back. This in fact putting lots of bias on your recent analysis. You are just talking about pull back and a heavy one (40%) in your last analysis. This might be wishful thinking. I like a good pull back too but what if it doesn't happen? what if it pulls back to $5200 only? you should make sure you will detect this and communicate to your followers that you no longer think there will be that heavy retrace you were talking about. Coming back some other day after Bitcoin price shoots to 6000+ and telling us that you were smart enough to detect this and bought back your Bitcoins at $5500 will put many of your followers off.
This is just an honest feedback and I like the details you put in your analysis. I would say getting all out, while you are long term bull might not really be good idea, and skews your analysis.
You wrote in your analysis: "I think price will shoot up toward the major overhead resistance zone . That's where I think we will run into a wall."
with that thinking how did you sell all your bitcoins on the 8th?