Here is an attempt to guess where the bottom for BTC could be, and where/when we might go next. We have already retraced more than 0.786 from ATH, so this is really finger in the air stuff.
I'm taking the bottom of the bull run impulse at $890, although this is debatable, it has top be there +/- $300 or so. For me, logically unless we get a 100% retrace, there are only two logical turning points:
1) $2980 - which was a prior resistance level that was backtested as support in Sept 17, or
2) $1800 - a prior support level from May - Jul 17
3) $950 - a prior support and an almost 100% retrace to the beginning of the impulse
We have some pretty big bullish divergence on the 1D chart since 19th Nov. My money would therefore be on a big bounce at the $2950 - $2980 range, before the end of December, and that could be the turning point. For confirmation we'd need to break the yearly descending trendline (looking for recovery over $4500) and then break back through the yearly support level at $6k (which will now act as a resistance). Once we have that then we can consider another macro wave up (i.e. next bull run) - which based on EW and estimated pitchfork, could put us at $22,000 to $26,000 by March 2020.
The alternative for 2) would be roughly similar in terms of outcome but perhaps 2 -3 months behind schedule.
If we go below $1800 then I think we are destined for 100% retrace and dipping below the $1000 mark, but I think this would act as a very strong psychological support, and keep us from a technical 100% retrace (we can hit 99.9% retrace and still have technical validity of EW). In this case then the outcome can still be similar but delayed by yet another 2 - 3 months and we would probably need to cap our expectation about the top of the next bull run wave, perhaps to $20,500 - $24,000 by late 2020. That's not a bad thing necessarily because overall bigger returns will be possible if we can catch the bottom.
Possible ETF decisions over the next 6 months may help make up the decision about which of these 3 scenarios materialises, as we all know that the market is watching this.
With the huge size of the retrace here I am wondering about the validity of EW and pitchfork application on a non-log chart. I may also post an alternate analysis based on log chart to see if it aligns.
I'm taking the bottom of the bull run impulse at $890, although this is debatable, it has top be there +/- $300 or so. For me, logically unless we get a 100% retrace, there are only two logical turning points:
1) $2980 - which was a prior resistance level that was backtested as support in Sept 17, or
2) $1800 - a prior support level from May - Jul 17
3) $950 - a prior support and an almost 100% retrace to the beginning of the impulse
We have some pretty big bullish divergence on the 1D chart since 19th Nov. My money would therefore be on a big bounce at the $2950 - $2980 range, before the end of December, and that could be the turning point. For confirmation we'd need to break the yearly descending trendline (looking for recovery over $4500) and then break back through the yearly support level at $6k (which will now act as a resistance). Once we have that then we can consider another macro wave up (i.e. next bull run) - which based on EW and estimated pitchfork, could put us at $22,000 to $26,000 by March 2020.
The alternative for 2) would be roughly similar in terms of outcome but perhaps 2 -3 months behind schedule.
If we go below $1800 then I think we are destined for 100% retrace and dipping below the $1000 mark, but I think this would act as a very strong psychological support, and keep us from a technical 100% retrace (we can hit 99.9% retrace and still have technical validity of EW). In this case then the outcome can still be similar but delayed by yet another 2 - 3 months and we would probably need to cap our expectation about the top of the next bull run wave, perhaps to $20,500 - $24,000 by late 2020. That's not a bad thing necessarily because overall bigger returns will be possible if we can catch the bottom.
Possible ETF decisions over the next 6 months may help make up the decision about which of these 3 scenarios materialises, as we all know that the market is watching this.
With the huge size of the retrace here I am wondering about the validity of EW and pitchfork application on a non-log chart. I may also post an alternate analysis based on log chart to see if it aligns.
Comment:
We broke up from the small wedge without hitting the $2980 level. Now we need to see if we climb back up to the big wedge resistance around $4400. Need to watch that in case of an unexpected break/continuation up, but I think most likely we go back down from there to $2700 or $1800. A turn at around $2700 would be nice as it would give us a 3rd point to define the support line of a large descending wedge and likely maintain the bullish divergence to give us a proper big turn by late Jan.
Comment:
Seems to be completing the wedge roughly as expected. Now looking for a drop to around $2700 and finding strong support at that level, hopefully a big rejection for the bears to recover and break out of the wedge.
Comment:
Very interesting time right now. The one year descending resistance line has now been defined by 4 points, and we're getting very close to it again now, with a strong rejection by support around 3500 and some strong bullish divergence in play on the 4H as well. The divergence says we should see an upward move and break the descending trend line. However the volume trend has been reducing since mid November, and this suggests that we will go down again, likely to $3k or below.
If we do break the trendline, we need to wait for confirmation that it could be a reversal, which for me means a daily green candle with at least 400k - 500k BTC daily aggregate trade volume.
If we go down, watch for the strength of resistance around $2800 - $3000, if we don't get some buying volume there then look at buys around $1800.
If we do break the trendline, we need to wait for confirmation that it could be a reversal, which for me means a daily green candle with at least 400k - 500k BTC daily aggregate trade volume.
If we go down, watch for the strength of resistance around $2800 - $3000, if we don't get some buying volume there then look at buys around $1800.
Comment:
We made it above the trendline but we don't have confirmation yet, the volume is not there. This could be a bull trap. We need to watch the 4H and 1D chart for a clear indication.
Comment:
Looking positive now with improving volume.
The 4250 to 4500 resistance area is absolutely key. If we can get through that then I think we can recover to the 6k region without too much trouble. If that happens then I think the 6k support will be unbreakable, perhaps we spend a good portion of the year in the 6k - 11k region to set up for another major bull market from the end of 2019.
The next weeks will tell us a huge amount. Just maybe 3200 was the bottom and not 2980 after all!
The 4250 to 4500 resistance area is absolutely key. If we can get through that then I think we can recover to the 6k region without too much trouble. If that happens then I think the 6k support will be unbreakable, perhaps we spend a good portion of the year in the 6k - 11k region to set up for another major bull market from the end of 2019.
The next weeks will tell us a huge amount. Just maybe 3200 was the bottom and not 2980 after all!
Comment:
We broke above the 4250 to 4500 resistance with volume, which is awesome. The timescale for my original projection need adjusting (see below) but the fundamentals are still valid. We need to see sustained progress towards 6k over the next couple of weeks, in particular to sustain above the 1D EMA200 and test it as a support. The last time that happened successfully in Oct 15 it was the start of a 100x bull-run. We have been above it in 2018 for periods of 1 month at a time, so a valid measure would be spending 3 months above it, 1 or two solid tests of it as a support and getting through 8500. I think it's certainly possible to see up to $11k this summer and new ATH's during summer 2020.
I haven't yet entered with any new capital but will look for a good entry over the next days.
I haven't yet entered with any new capital but will look for a good entry over the next days.
Comment:
On the 15-min chart, a few different options for where we can see the retrace and retest of supports. The yellow line is roughly where the 1H EMA200 will be tracing up through the 4250 to 4450 region which was our big resistance, and now we hope will be our big support. Ideally we see a descending wedge form and punch into this region and get a big rejection upwards. If that happens it will be a great buying opportunity. However it's also possible for us to break directly up from here, it would only be a 0.382 retrace on this morning's move but it would be a perfectly valid and bullish pattern.
Comment:
Pitchfork inside pitchfork on the 4H chart. Targetting the pitchfork centre lines, these become coincident close to the 6k resistance in late April (blue circle). Coming down we went through the region twice as fast but I don't think we can expect as many short stops to help us on the way up as we had long stops helping us on the way down.
Possible trade setup indicated, although in reality I will be looking for entries on some alts (such as NANO) when BTC hits a good entry point.
Possible trade setup indicated, although in reality I will be looking for entries on some alts (such as NANO) when BTC hits a good entry point.
Comment:
Bearish Divergence on 15 min through 4hr timescales, great opportunity to short for a few percent before looking for entry to a long closer to the 4500 support.
Comment:
Shape of the wedge has evolved with a new upper edge shifted higher today, but this doesn't change anything, we still have an ascending wedge with bearish divergence on the RSI. A drop back to support in the 4450 - 4600 range still makes sense as a good place for a long entry.
The bullish divergence is present on the 1D all the way down to the 15m. I am pretty convinced we are due for a move up at least to the 4200 to 4400 range, probably triggered by a reaction off the $3000 - $3100 level, perhaps dipping to my predicted 2980 target, and a then break out of the small descending wedge.
The next question is whether we can then break the larger 1Y descending trend line or if we drop back down and break the $2980 support. Personally I will be buying some alts as soon as BTC gets close enough to $3k.