Slot

Switching roles, support & resistance

BITSTAMP:BTCUSD   Bitcoin / Dollar
Fellow trading adventurers,

This is a mix of a short term (upcoming 1-2 weeks) and medium term (2-3 months) forecast.

Short Term, Upward (24-27 oct)
- 4H MACD is gaining momentum
- 4H Stoch RSI shows room for some upward momentum
- Market playing around the 50% fibonacci, which often causes a small bounce (5-10%) but usually not strong enough for bottoming
- My target is indicated by the red square in the chart, I’m expecting that previous support (~$370) will turn into strong resistance

Short Term, Downward (26 oct - 5 nov)
- Daily MACD is losing momentum and has more room for downward movement
- Stoch RSI has room left for more bottom
- Historically Bitcoin             loves 38.2% fibonacci retracements at reversal moments, look at April             2014, July 2013 and Feb 2012
- Why the green lines are of importance / forming support: previous resistance turning into support, price has bounced twice off this line now. This type of event also occurred at previous reversals such as April             2014 and is a common trading mantra
- My target is indicated by the green squares in chart

Medium Term (october - december / why I think Bitcoin             is in reversal)
1. Weekly MACD is gaining positive momentum, which ever since the beginning of Bitcoin             has been a strong indicator of market direction
2. We’re in a bear market since June 2014, historically a bear trend doesn’t last longer than roughly 5 months (examples: June 2011 - Nov 2011, April             2013 - July 2013, Nov 2013 - April             2014)
3. End of the year sentiment: The temperature is dropping, darkness arising. The weather is turning against us, our expenditures being limited. Cash and spare time overflowing, let's rise.
- Nov/Dec 2010 - nov down (after large rise), dec up
- Nov/Dec 2011 - up
- Nov/Dec 2012 - up
- Nov/Dec 2013 – nov up, dec down (after large rise)

Strategy
1. As long as the downward green trendlines don't get hit, I'll be lowering my bids accordingly on a daily basis, It would make the third hit on this trendline , three times a charm. I'd expect it to happen around the 38.2% or 23.6% fib levels.
2. If none of this occurs and the market doesn't make lower lows, I’ll be buying in again when the daily 7/30 EMA crosses and the top bearish trendline breaks (blue, purple and orange lines)
3. If I’m completely wrong and the green trendlines are being strongly broken I’ll be jumping ship (stopping my losses) shortly after

Main uncertainties
- Daily MACD is most likely crossing and turning 'red' tomorrow (25th), which might lead to an emotional sell-off
- Strategy is entirely based upon the idea that the green lines will act as support and won't be broken (= bullish view), which is a large risk
- We might have already hit bottom around 50% Fibonacci level @ 344.34 (Stamp), selling/shorting this weekend might be a wrong decision
My short term forecast (red square) didn't play out, I'm lacking experience in trading on lower timescales other than the daily. But as you can see the other -more important- target just got hit, I personally expect we made our low for the year, for next week a retest of this low is a strong possibility, and a lower low to the 23.6% level is a low probability from my perspective.
Reply
very goood analyses thank you
+1 Reply
This is wonderful!
+1 Reply
Interesting. I see that you also expect a bottom at around $330 or $312. This is also my conclusion. My chart is similar, please take a look:

P.S. You wrote a very long description. My advise would be to write a conclusion of your analysis as "tl;dr" next time.
Reply
Slot ChartArt
Thanks for the feedback. Personally on a website like Tradingview I prefer to read long descriptions with all the reasoning behind a trading decision, as an element of feedback, knowledge and henceforth maximizing profits. But an executive summary on top might be a good idea for the next chart, cheers.
Reply
"executive summary" sounds good, yes :)
+1 Reply
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