Why Bitcoin is most probably going to visit $20k

Look left! Two rules:

1) Price action is in a bull market

2) RSI was recently 80+ on the weekly chart

The 21-weekly EMA (yellow line) is bull market support. Circled in black during the 2017 bull run we know when RSI was above 80 it corrected down to a RSI of 50 before price action touched the 21-week EMA. RSI is currently at 83 on the weekly. Enough said ;-)

I expect this Bitcoin correction to be over by late March.

Comment:

The Hanging Man:

"A hanging man is a type of bearish reversal pattern, made up of just one candle, found in an uptrend of price charts of financial assets. It has a long lower wick and a short body at the top of the candlestick with little or no upper wick."

If this week's candle should close lower then the hanging man reversal pattern is confirmed. At this point I'm expecting a slow decline in price action until mid-March rather than a sudden drop.

Comment:

A bullish outlook to consider which would void the above idea I think needs to be mentioned here. Price action is consolidating inside an ascending triangle. Following the overbought condition (top chart) it is normal for RSI to break. RSI appears to be finding support, however.

This idea is void if price action breaks out of triangle resistance. Price action is likely to make a sudden move toward $55k in that event.

Comment:

Bullish outlook no more. RSI support has failed. RSI resistance now until mid-February.

Comment:

Price action lands on the 618 golden ratio - a favorite support area for BTC price action. A bounce upward from here should be expected.

Trade active:

Not yet satisfied this idea should be consigned to the dustbin of history.

On the 4-day chart below:

1) Regular bearish divergence.

2) RSI support was / is broken.

3) The golden ratio Bitcoin respects, 0.618, remains around $21k.