BTCUSD: What happens next? The bullish and the bearish...
We are approaching a very interesting spot for Bitcoin. In fact, I sincerely believe that what happens over the next 2-3 weeks will determine Bitcoin's trajectory over the next 1-2 YEARS. Yes - that's how important I think this spot is. From this area, we will either go back down to lower 8ks/upper 7ks, and then, after a bounce and consolidation, capitulate back down into the 5k area and potentially much lower. OR - we will break back up through 9.5k area, consolidate for a while, and then start our next bull run to a target peak of anywhere from 50k to 200K some time mid to late next year.
Let's have a look at where we are, starting with the bullish factors:
BULLISH FACTORS
1. Support on weekly 21 MA. It's textbook trading 101 and this moving average has proven its historical importance for Bitcoin since the genesis.
2. Support on various other key higher-time-frame moving averages, including 89 EMA on 3-day and 2-day, 50 EMA on 4-day, and 200 EMA on daily.
3. Huge - but not yet confirmed, of course - bullish divergences on pretty much all higher time frames.
4. HUGE bullish - but not yet confirmed - structures on higher time frames, including a massive inverse head & shoulders forming on the weekly and massive cup & handles forming on all time frames from 12-hr through 4-day.
5. Big bounce, in late December, off long-term logarithmic trendline going all the way back to genesis.
6. Key support on RSI and stochastic trendlines on almost all higher time frames.
7. We are still, technically, following a higher low and higher high trajectory and 3-day and 4-day time frames.
8. Overall sentiment around halving coming up + Bakkt Bitcoin payment app coming out soon.
BEARISH FACTORS
1. Losing the parabolic uptrend we had started earlier this year
2. Lower highs and lower lows on daily
3. Potential head & shoulders forming on daily
4. Bearish divergences on lower time frames up to 10hr
5. Coronavirus and uncertainty around correlation between stock market and Bitcoin
6. Rejection from 10.5k and inability to form a higher high on weekly
Putting all of the above together - what do I see? I do think the likelihood is that we go the bullish route. This DOES NOT preclude some kind of correction back down to mid or upper 8ks first, though, but I do think we are about to head into our next major bull run.
Of course, as a trader - I will play it whichever way it ends up going :)
Cheers and happy trading.
Let's have a look at where we are, starting with the bullish factors:
BULLISH FACTORS
1. Support on weekly 21 MA. It's textbook trading 101 and this moving average has proven its historical importance for Bitcoin since the genesis.
2. Support on various other key higher-time-frame moving averages, including 89 EMA on 3-day and 2-day, 50 EMA on 4-day, and 200 EMA on daily.
3. Huge - but not yet confirmed, of course - bullish divergences on pretty much all higher time frames.
4. HUGE bullish - but not yet confirmed - structures on higher time frames, including a massive inverse head & shoulders forming on the weekly and massive cup & handles forming on all time frames from 12-hr through 4-day.
5. Big bounce, in late December, off long-term logarithmic trendline going all the way back to genesis.
6. Key support on RSI and stochastic trendlines on almost all higher time frames.
7. We are still, technically, following a higher low and higher high trajectory and 3-day and 4-day time frames.
8. Overall sentiment around halving coming up + Bakkt Bitcoin payment app coming out soon.
BEARISH FACTORS
1. Losing the parabolic uptrend we had started earlier this year
2. Lower highs and lower lows on daily
3. Potential head & shoulders forming on daily
4. Bearish divergences on lower time frames up to 10hr
5. Coronavirus and uncertainty around correlation between stock market and Bitcoin
6. Rejection from 10.5k and inability to form a higher high on weekly
Putting all of the above together - what do I see? I do think the likelihood is that we go the bullish route. This DOES NOT preclude some kind of correction back down to mid or upper 8ks first, though, but I do think we are about to head into our next major bull run.
Of course, as a trader - I will play it whichever way it ends up going :)
Cheers and happy trading.