Since the is still in a downtrend off of the 19666 high, and since there is strong support beneath the target zone, we must consider the possibility that the target zone will fail. Therefore, if the market enters the target zone, one should buy only if there is a daily buy signal issued after the target zone is reached. If a daily buy signal occurs after the target zone is hit, I will post it.
If there is no daily buy signal, then there is no trade in this target zone, and the market will likely continue down to the next , which would be the 200 daily moving average (shown in purple). We'll cross that bridge if and when we will come to it.
Keep in mind that this correction is also affecting most alt coins, so when BTC is a buy, most of the alt coins will follow.
Why is this the potential 'Buy of 2018?' Because if the target zone holds and we subsequently takes out the 19666 high, then the low made in the target zone will more than likely be the low of the year, and BTC will be on track to reach its potential of $100,000+ in late April/early May of 2018. So the buy would offer a potential 10x return in less than 6 months. See .
We are not buying because there is no indication that we are not going to continue down. There has been no capitulation where selling pressure dries up and buyers overwhelmingly come in to the market to push it higher. In other words, there as been no spike higher on significant volume. And since we are currently in a downtrend, and today's high is lower than yesterday's high and the 1st resistance trendline is still holding, there is no reason to believe that the current down trend is not going to continue.
Absent capitulation, what would change the view? If the market took out yesterday's high, the resistance trendline, and the resistance right above that trendline at 12,800, then that would demonstrate strength sufficient to show that the downtrend might be over. But that has not happened!!!
So, we wait; we wait until the market says it's (likely) done going down.
As shown in the chart below, I've added the resistance channel by drawing a red line parallel to the major resistance trendline and going thru point B. Note that the low end of the red support channel line intersects the highest rising support trendline right in the target buy rectangle. This type intersection often acts as a magnet to the market, so I put the bulls-eye red X right on that spot, which is about the 9,000 level.
The weekly inside doji bar had a high of 11989.15. A break of this bar to the upside is a buy signal. Expect upside at least to the resistance channel high at just above 15,000. There also may be a retest of the 19666 high.
It is possible that this trade could also take BTC to new highs. HOWEVER, please beware that we are possibly in a larger degree correction and new highs may not be coming; it is also possible that a retest of the 9222.00 low or even lower lows may occur if this trade cannot significantly and strongly break through the 19666 high. For more details see:
The market is now saying that BTC is a buy here, for the following reasons:
1. We have a repeating pattern in that we hit the 200 mov avg and the .882 retracement.
2. Sufficient volume to be a market bottom
3. The major coins are all up 18%-30%.
You can see the repeating pattern in the chart below. It is possible that the BTC will make one more low to the inner blue channel line shown in the chart. This potentially lower low would be in the 6600 area.
If you are inclined to buy now but want further confirmation, you can buy thru the high of the previous 240M bar (16:00) which is 9096.79 (BitStamp).
1. started off of the inner resistance channel line
2. found support at the 200 moving avg line
3. are 4 grid lines in length (so far)
4. made .882 corrections to the inner support channel lines.
If the similarities continue, then when the current correction is over, BTC would rally to the upper resistance channel line reaching the target of $100k - $110k.
The April 2013 correction was 4 grid lines in length and the correction lasted 12 weeks. The current correction has reached the same length (4 grid lines), but in 6 weeks. The market may simply just rally from the current low of 7625.25 (BitStamp), as it has already started to do. But more likely there will be either a testback after a few weeks of rally or sideways movement, or even one more push down to the inner blue support channel line, meaning a lower low which could reach the 6500 area. In any case, the rally towards the target area should either be on the way, or commence in six weeks or so after one more push down. Alt coins are rallying as well, so that's a good sign. In fact, Litecoin is already up over 70% from it's $100 low.
The rally into the 1163 high in Nov of 2013 which reached the upper channel resistance line was 9 grid lines in length and 21 weeks in time. Using those figures as a projection for the rally from our current correction low would take the market to the target shown in late July 2018.