BTC/USD, Technical Outlook, Edition #114 (29/09/2021)
Bears clinch price action as dejected Buyers face TKO
Bitcoin continues carving away at the support block around USD 41K.
In last night's report, Q identifies a possible technical knockout to bulls should they falter in blocking price action from dodging below the 0.5 fib zone.
Bitcoin, BTC/USD - Daily (D1)
Waves whittle down a cliff face through constant degradation of the bedrock on each successive blow.
Extrapolate this analogy to the charts...
The vertical cliff is a support or resistance block in the financial markets, and waves are downtrends or uptrends. Each consecutive wave that hits the cliff loosens the bedrock - i.e. positions are being executed, weakening the zone.
Ergo, price action repeatedly striking at support and resistance levels tends to erode the block.
Furthermore, a zone becomes structurally weaker as each new wave consumes the support - continuing until nothing remains to hold the price up.
According to technical theory, price action should not visit the same zone more than three times. Otherwise, the risk of support or resistance failure rises exponentially.
As each tap inserts more participants into the market, fewer remain to fortify the zone - resistance or support - under siege.
Q notes the H4 BTC/USD chart below, where this concept unravels at present…
Following a fifth consecutive tap on support, the block is less likely to hold with each additional strike - until breakdown occurs.
Bitcoin, BTC/USD - 4 Hour (H4)
Q accepts that rangebound markets are dull.
Choppy price action clouds retail sentiment while the big fish pursue tasty morsels of liquidity.
Moreover, a bearish twist in the key Moving Averages hints at the probability of extended downside to come.
Q's Conclusion
Fib range (.382 and 0.5) remains unbroken for the time being - an approaching opportunity rests in the coming candle closes...
Until then, recognise that watching paint dry can take a tremendous toll on the mental fortitude of most sane individuals. Q is wary of restless fingers, choosing to wait for BTC/USD to close above USD 44K or below USD 41K.
"Water can flow or it can crash. Be water my friend" - Bruce Lee
Shifts in market structure are instrumental in distinguishing between a reversal or temporary bounce. Hence, patience is of the essence when utilising retests as an entry point.
Additionally, order entries at either the rejection of resistance or a bounce from support can be viable approaches. But, recognise that elevated risk besets the path of impatient speculators plunging hastily into untested waters.
Q also heeds an invalidation of the bearish argument if BTC/USD closes above USD 44.3K - i.e. setting a fresh new High.
Until proven otherwise, this zone is technical resistance - at least for now...
See you again for the next update.
- q
Follow us for more detailed analysis on all markets, including Decentralised technology. Subscribe to our Technical Outlook report published daily on Substack!
Bitcoin continues carving away at the support block around USD 41K.
In last night's report, Q identifies a possible technical knockout to bulls should they falter in blocking price action from dodging below the 0.5 fib zone.
Bitcoin, BTC/USD - Daily (D1)
Waves whittle down a cliff face through constant degradation of the bedrock on each successive blow.
Extrapolate this analogy to the charts...
The vertical cliff is a support or resistance block in the financial markets, and waves are downtrends or uptrends. Each consecutive wave that hits the cliff loosens the bedrock - i.e. positions are being executed, weakening the zone.
Ergo, price action repeatedly striking at support and resistance levels tends to erode the block.
Furthermore, a zone becomes structurally weaker as each new wave consumes the support - continuing until nothing remains to hold the price up.
According to technical theory, price action should not visit the same zone more than three times. Otherwise, the risk of support or resistance failure rises exponentially.
As each tap inserts more participants into the market, fewer remain to fortify the zone - resistance or support - under siege.
Q notes the H4 BTC/USD chart below, where this concept unravels at present…
Following a fifth consecutive tap on support, the block is less likely to hold with each additional strike - until breakdown occurs.
Bitcoin, BTC/USD - 4 Hour (H4)
Q accepts that rangebound markets are dull.
Choppy price action clouds retail sentiment while the big fish pursue tasty morsels of liquidity.
Moreover, a bearish twist in the key Moving Averages hints at the probability of extended downside to come.
Q's Conclusion
Fib range (.382 and 0.5) remains unbroken for the time being - an approaching opportunity rests in the coming candle closes...
Until then, recognise that watching paint dry can take a tremendous toll on the mental fortitude of most sane individuals. Q is wary of restless fingers, choosing to wait for BTC/USD to close above USD 44K or below USD 41K.
"Water can flow or it can crash. Be water my friend" - Bruce Lee
Shifts in market structure are instrumental in distinguishing between a reversal or temporary bounce. Hence, patience is of the essence when utilising retests as an entry point.
Additionally, order entries at either the rejection of resistance or a bounce from support can be viable approaches. But, recognise that elevated risk besets the path of impatient speculators plunging hastily into untested waters.
Q also heeds an invalidation of the bearish argument if BTC/USD closes above USD 44.3K - i.e. setting a fresh new High.
Until proven otherwise, this zone is technical resistance - at least for now...
See you again for the next update.
- q
Follow us for more detailed analysis on all markets, including Decentralised technology. Subscribe to our Technical Outlook report published daily on Substack!