Last week Bitcoin closed its first bearish 1W candle (-7.32%) since April 21 (-2.82%), which was the strongest red candle since February 24 (marginally as this one was at -7.34%, the next one was at December 2 at -17.91%).
So how bad can this be for BTC? A quick answer is not bad at all! Such a formation doesn't hurt Bitcoin's bullish chances, in fact it enhances them.
How is that so? Well during the start of the previous 2 bull cycles (2015 and 2012) the price action also delivered a big bearish 1W candle following the break out from the 1W MA50. This candle effectively put a stop to the parabolic rise on both occasions. What followed this candle was consolidation in the form of a Triangle pattern that lasted 4 - 6 months before giving way to a new parabolic rise.
Assuming BTCUSD is following a similar pattern, we may have at least a 4 month consolidation ahead of us. However we've seen already that the start of the current bull market has been more aggressive to a fair extent compared to the previous ones. We'll see if the price moves as aggressively in the coming weeks.
What this analysis shows is that Bitcoin long term investors have no reason whatsoever to worry about as they have another bullish sign to feel comfortable about. The 4 week close above the MA50. Closing above the MA50 for four straight weeks has been one of the strongest signals that the new bull cycle has started. The MA50 has since supported the new bull run and was only broked deep into the bear markets that followed. I am confident we have a similar case in our hands.
I am confident we have a similar case in our hands. Are you?
Still, I stay cautious because of the candlestick pattern which formed after the bearish Weekly candle close - Evening Star. Usually, those candlestick patterns, especially Evening Star and Morning Star, have a decent impact on the price if they occur on higher timeframes.
Mid-term I'm with bearish bias but currently, we might see a short-term bounce upwards:
Pretty good criteria and pretty good setup after the counter trendline break a few hours ago!
Regards,
Vaido
TradingShot
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@VaidoVeek, Mr Vaido this consolidation is within the neckline of a Head and Shoulders pattern. Patience and it will break soon.
gumbler
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bullish cross on daily MACD,
TradingShot
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@gumbler, Good catch. It is trading on your lower channel right now, I guess you have this as the accumulation zone.