Hi everyone, thank you for taking the time to read my analysis on Bitcoin.
Looking at the chart from a longer-term perspective, it’s clear the Bitcoin has been consolidating in a large wedge since the first drop to 6k in Feburary.
Each reaction high touches the R1 trend line which has kept the price down since January 19th, and both bull traps to 11.7k as well as the one to 10k recently have found resistance at this line.
Each reaction low falls right in line with the S1 trend line that has supported bitcoin since the 5.4k low in November 2017, through the 6k low in February, and recently the 6.5k low in early April.
We are now approaching that trend line once again, and with Bitcoin looking very weak around 7.5k, I think the most logical prediction is another small drop to finally reach the S1 trend line around 6.8-6.9k.
This price range is right where the .786 Fibonacci retrace lies as well, providing additional confluence for support.
I think after falling for nearly all of May, we are bound to see some upside for the month of June.
So far that monthly cycle of price fluctuations has been playing out pretty well: Dec-Up, Jan-Down, Feb-Up, March-Down, April-Up, May-Down, June-Up?
As long as Bitcoin doesn’t start to make a rally from this price point (7.5k) and continues to fall right to the S1 Trend line, I think it is safe to assume we will see a relief rally up and it might be strong enough to move upwards and touch the bottom of the R2 trend line in blue.
I am predicting this area as my bullish target as it is right at the confluence of the R1 trend line, R2 trend line, and the 0.236 Fibonacci retracement of 10k to 6k. This is an area will Bitcoin will need to break out to turn bullish again, otherwise a drop out of this wedge will most likely lead to a huge fall in price for weeks to come. But I will update as we get closer to that range, we are much too far away to make any predictions like that right now.
Hope you guys found this analysis useful, please like if you did!
Trend Line Key
R1 = Resistance trend line from 12.9k (Jan.) to 11.7k (March) to 10k (April)
R2 = Support-turned-resistance trend line from 1.8k (July ’17) to 6.5k (April ’18)
S1 = Support trend line from 5.4k (Nov. ’17) to 6k (Feb ’18) to 6.4k (April ’18)
S2 = Resistance-turned-support trend line from ATH 0.42% (19.8k) to 17k and to 11.7k. This is the downtrend line that defined the bear market since December and was broken in April.
Looking at the chart from a longer-term perspective, it’s clear the Bitcoin has been consolidating in a large wedge since the first drop to 6k in Feburary.
Each reaction high touches the R1 trend line which has kept the price down since January 19th, and both bull traps to 11.7k as well as the one to 10k recently have found resistance at this line.
Each reaction low falls right in line with the S1 trend line that has supported bitcoin since the 5.4k low in November 2017, through the 6k low in February, and recently the 6.5k low in early April.
We are now approaching that trend line once again, and with Bitcoin looking very weak around 7.5k, I think the most logical prediction is another small drop to finally reach the S1 trend line around 6.8-6.9k.
This price range is right where the .786 Fibonacci retrace lies as well, providing additional confluence for support.
I think after falling for nearly all of May, we are bound to see some upside for the month of June.
So far that monthly cycle of price fluctuations has been playing out pretty well: Dec-Up, Jan-Down, Feb-Up, March-Down, April-Up, May-Down, June-Up?
As long as Bitcoin doesn’t start to make a rally from this price point (7.5k) and continues to fall right to the S1 Trend line, I think it is safe to assume we will see a relief rally up and it might be strong enough to move upwards and touch the bottom of the R2 trend line in blue.
I am predicting this area as my bullish target as it is right at the confluence of the R1 trend line, R2 trend line, and the 0.236 Fibonacci retracement of 10k to 6k. This is an area will Bitcoin will need to break out to turn bullish again, otherwise a drop out of this wedge will most likely lead to a huge fall in price for weeks to come. But I will update as we get closer to that range, we are much too far away to make any predictions like that right now.
Hope you guys found this analysis useful, please like if you did!
Trend Line Key
R1 = Resistance trend line from 12.9k (Jan.) to 11.7k (March) to 10k (April)
R2 = Support-turned-resistance trend line from 1.8k (July ’17) to 6.5k (April ’18)
S1 = Support trend line from 5.4k (Nov. ’17) to 6k (Feb ’18) to 6.4k (April ’18)
S2 = Resistance-turned-support trend line from ATH 0.42% (19.8k) to 17k and to 11.7k. This is the downtrend line that defined the bear market since December and was broken in April.
Comment:
Many of my followers know I have been comparing this entire April rally and May fall to the February rally from 6k and fall in March. Here is a snapshot of this February fractal pasted and conformed to the price action throughout April/May using the bar pattern tool. This fractal has been very good so far, let's see if it can continue to predict Bitcoin's pathway:
Comment:
Right now we're seeing a lot of manipulation, spikes up and down to confuse both bulls and bears. There's nothing that's making me consider a different plan however, so I am still looking at the S1 trend line for reversal.
But now that things are taking a little longer than I expected, price target is more likely around 6,900 range with the S1 trend line rising as time moves forward.
But now that things are taking a little longer than I expected, price target is more likely around 6,900 range with the S1 trend line rising as time moves forward.
Comment:
I have updated the path to my target due to the slow, sideways action we are seeing. By now we are used to this type of price action over the weekend, but we should keep in mind that the CME futures group recognizes Memorial day holiday which lasts until May 29th, so tomorrow should be pretty slow too. I expect things to change after the 29th when futures trading opens again.
Overall, my targets are still the same, but as I said in my last update the bottom is looking more like it will be around $6,900 and not the 6,800 range anymore due to the rising support trend line (S1)
Overall, my targets are still the same, but as I said in my last update the bottom is looking more like it will be around $6,900 and not the 6,800 range anymore due to the rising support trend line (S1)
Comment:
We might see a jump in price soon up to around 7,400 and test the top of this descending channel. If my original prediction goes through I expect it to fall back down to finally test the S1 trend line. But I will trade accordingly when price gets there.
Comment:
Well this worked out, although I was not expecting this type of volume and jump in price so quickly. This is making me reconsider a drop down to 6,900. I already mentioned that 6,800 is most likely out of the question now with the rising support trend line but now I’m not sure if we’ll see the price drop out of this to finally reach the S1 trend line below. I need to see these channels broken before I scrap that original plan (read more below)
For now, it seems like the bulls are showing their strength and it looks like the bears have already lost their momentum. If the top of this wedge drawn in black gets broken, I am looking towards the broader descending channel drawn in thick red lines for price to meet resistance. This is somewhere around 7.8k-7.9k, depending on how long it takes to get to the top of the red channel.
But again, first we need to break the top of this black channel before looking higher up.
The first price to break is around 7.4k-7.5k. The 0.618 fib retrace is also right above the top of the black channel so don’t get fooled by a breakout unless there is substantial volume to go along with it.
Second price to break will be 7.8-7.9k, but we will only consider once the black channel gets broken.
For now, it seems like the bulls are showing their strength and it looks like the bears have already lost their momentum. If the top of this wedge drawn in black gets broken, I am looking towards the broader descending channel drawn in thick red lines for price to meet resistance. This is somewhere around 7.8k-7.9k, depending on how long it takes to get to the top of the red channel.
But again, first we need to break the top of this black channel before looking higher up.
The first price to break is around 7.4k-7.5k. The 0.618 fib retrace is also right above the top of the black channel so don’t get fooled by a breakout unless there is substantial volume to go along with it.
Second price to break will be 7.8-7.9k, but we will only consider once the black channel gets broken.
Comment:
After just breaking the top of the small channel (in black), the price is finding resistance at the 0.618 fib retrace. In my last update, I said do not get too excited if we break out of the black channel because we have 2 additional resistances to break through before our next target around 7.9k-8k.
Not only is the 0.618 holding the price down right now, but the 200MA in orange above is also acting as resistance.
The RSI is showing a bearish divergence on the 1hr time frame, and the CMF has already dropped below 0. Now, the CMF is showing a slight rebound back up, so this could break out to the upside if the bulls can show up again.
If the price drops back into the black channel, more downside can be expected.
Hope this helps!
Not only is the 0.618 holding the price down right now, but the 200MA in orange above is also acting as resistance.
The RSI is showing a bearish divergence on the 1hr time frame, and the CMF has already dropped below 0. Now, the CMF is showing a slight rebound back up, so this could break out to the upside if the bulls can show up again.
If the price drops back into the black channel, more downside can be expected.
Hope this helps!
Comment:
And there is the drop I called for in my last update, like clockwork :)
Now I don't know where the price is going to stop exactly, but there is a bearish cypher pattern here, look at the .618 in green for the next target for this pattern.
If the price cannot reverse at this point (7240-ish) then I'll be looking at the bottom of the black channel for a bounce. Or maybe I'll finally get what I was originally calling for and the price will slide right down the channel and bounce off the blue support line (S1). That would be the ideal situation to set up for a long play towards the 8k region and possibly even higher.
Now I don't know where the price is going to stop exactly, but there is a bearish cypher pattern here, look at the .618 in green for the next target for this pattern.
If the price cannot reverse at this point (7240-ish) then I'll be looking at the bottom of the black channel for a bounce. Or maybe I'll finally get what I was originally calling for and the price will slide right down the channel and bounce off the blue support line (S1). That would be the ideal situation to set up for a long play towards the 8k region and possibly even higher.
Comment:
Update: So far this bounce from the low has been pretty unconvincing and weakness in the market is still apparent. I think most of us were hoping to see a much bigger bounce with higher volume to turn bullish. This weakness is making me think we might fall back down again soon, but I’m still staying long from when I called a move up 3 days ago from the 7,100 price range.
Take a look at my snapshot below. We have clearly broken out of the descending channel in black but we have more resistances ahead if the bulls are able to keep pushing.
The next resistance area I am focusing on is in the $7,800 range.
This price range is at the confluence of the 0.618 fib level, the top of the bigger descending channel (in red), and the 200MA (in orange) which looks like it will line up with the top of this channel if prices push higher. If we break out of this red channel, I’ll move my stop loss to break-even.
Take a look at my snapshot below. We have clearly broken out of the descending channel in black but we have more resistances ahead if the bulls are able to keep pushing.
The next resistance area I am focusing on is in the $7,800 range.
This price range is at the confluence of the 0.618 fib level, the top of the bigger descending channel (in red), and the 200MA (in orange) which looks like it will line up with the top of this channel if prices push higher. If we break out of this red channel, I’ll move my stop loss to break-even.
Comment:
New game plan:
With the weakness in this move up, it seems like we might not reach our first target of $7,800 just yet. Currently the price is now testing the top of the black channel as support, so before we move on to the harmonic, we need to see the price fall back into this channel.
Here we see a bullish shark pattern emerging on the 2hr time frame with Point D at around 6,975. This PRZ also happens to form confluence with the S1 trend line. This is where I predicted the rally to begin, and since we never really got down to the trend line for a reversal, I think this scenario is definitely possible now. This move up was just a fakeout, to confuse people. It seems very similar to what we saw in early April when price was spiking up and down before finally shooting up. I think it’s possible that we see a similar situation unfold.
And that’s why I won’t close this idea yet. I think it’s still possible we make the real bounce off the S1 trend line and head upwards towards the top of the big wedge as I originally called for.
Targets 1 and 2 are both provided on the green Fibonacci levels, but first we need to see this pattern complete itself.
Stop loss is in red below. Please do not enter this trade until we stop at Point D and make sure we aren’t seeing rapid falling or high sell volume at that point either. Then you can enter a long position and set your stop loss to the 1.414 extension of XA.
Here’s the link to the new update:
With the weakness in this move up, it seems like we might not reach our first target of $7,800 just yet. Currently the price is now testing the top of the black channel as support, so before we move on to the harmonic, we need to see the price fall back into this channel.
Here we see a bullish shark pattern emerging on the 2hr time frame with Point D at around 6,975. This PRZ also happens to form confluence with the S1 trend line. This is where I predicted the rally to begin, and since we never really got down to the trend line for a reversal, I think this scenario is definitely possible now. This move up was just a fakeout, to confuse people. It seems very similar to what we saw in early April when price was spiking up and down before finally shooting up. I think it’s possible that we see a similar situation unfold.
And that’s why I won’t close this idea yet. I think it’s still possible we make the real bounce off the S1 trend line and head upwards towards the top of the big wedge as I originally called for.
Targets 1 and 2 are both provided on the green Fibonacci levels, but first we need to see this pattern complete itself.
Stop loss is in red below. Please do not enter this trade until we stop at Point D and make sure we aren’t seeing rapid falling or high sell volume at that point either. Then you can enter a long position and set your stop loss to the 1.414 extension of XA.
Here’s the link to the new update:
Comment:
Looks like Bitcoin is going to drop a bit now. Price has found resistance at the 0.618 fib level and also right at the 200MA on the 2hr time frame.
Comment:
And there’s the drop I thought would happen if the price couldn’t get past the 0.618 fib level (in black) and the 200d MA (on 2hr TF) as resistances. There was also the upper trend line acting as resistance drawn from 9.4k down to 8.6k and now the recent high just hit this trend line before falling.
On the 4hr time frame we can see the price finding support around the 50d MA (in green) and the 0.618 fib level (in red). This red fib retracement was drawn from the 10k down to the 6k low in February.
The black fib retracement is drawn from 10k down to 6.4k (early April) and so the next support would be at the 0.786 fib level which is just around $7,200. I think this support should hold, but if it doesn’t then below is the S1 trend line which should act as a major support that the bulls do not want to see break.
On the 4hr time frame we can see the price finding support around the 50d MA (in green) and the 0.618 fib level (in red). This red fib retracement was drawn from the 10k down to the 6k low in February.
The black fib retracement is drawn from 10k down to 6.4k (early April) and so the next support would be at the 0.786 fib level which is just around $7,200. I think this support should hold, but if it doesn’t then below is the S1 trend line which should act as a major support that the bulls do not want to see break.
Comment:
Since my last update, bitcoin fell through the 50MA on the 4 hr time frame as well as below the 0.618 fib level in red. Switching to the hourly TF we see the price fell below the 200MA and it also fell through the base of this short term channel (in purple) that has been formed during this movement up the last week.
The next support will be found at the 0.786 fib level (in black) around 7,200. If this also breaks then are final target will be the S1 trend line below (in blue).
This support really needs to hold up because if this breaks, things are going to get really bad for Bitcoin. A breakdown of the S1 trend line with heavy selling volume will essentially confirm the continuation of the bear market.
S1 = Support trend line from 5.4k (Nov. ’17) to 6k (Feb ’18) to 6.4k (April ’18)
The next support will be found at the 0.786 fib level (in black) around 7,200. If this also breaks then are final target will be the S1 trend line below (in blue).
This support really needs to hold up because if this breaks, things are going to get really bad for Bitcoin. A breakdown of the S1 trend line with heavy selling volume will essentially confirm the continuation of the bear market.
S1 = Support trend line from 5.4k (Nov. ’17) to 6k (Feb ’18) to 6.4k (April ’18)
Comment:
Just got a small jump up and back above the purple support line as well as the 50MA on the 4hour time frame and just above the 0.618 fib level in red.
But the next resistances are so close above, let’s see what happens over the next few hours. We will need the price to break past the 50MA on 2hr time frame, then right above is the 200MA in line with the black resistance line that is coming down from 9.4k to 8.6k to 7.7k.
If the price can break through those resistances I just mentioned, especially the downward black trend line, then there’s a much higher chance we will finally see a rally up to the 9k price range at the top of the huge wedge we have been in the last few months.
It looks to be gaining momentum as we speak, but keep in mind if it can’t push higher then we might be seeing a head and shoulders forming instead, with the right shoulder beginning to form right now.
But the next resistances are so close above, let’s see what happens over the next few hours. We will need the price to break past the 50MA on 2hr time frame, then right above is the 200MA in line with the black resistance line that is coming down from 9.4k to 8.6k to 7.7k.
If the price can break through those resistances I just mentioned, especially the downward black trend line, then there’s a much higher chance we will finally see a rally up to the 9k price range at the top of the huge wedge we have been in the last few months.
It looks to be gaining momentum as we speak, but keep in mind if it can’t push higher then we might be seeing a head and shoulders forming instead, with the right shoulder beginning to form right now.
Comment:
Just as soon as it looked like Bitcoin was about to break out of the upper resistance trend line in black, it fell right back below it.
In my last update I said if the price can't push higher then there's a chance a head and shoulders pattern is forming. With the right shoulder developing now, it looks more likely to complete.
Right now price is finding support on the 0.618 fib retrace (in red), the 200MA and 50MA (on the hourly TF) and finally the purple support line.
As long as the price can stay above this support, it should be able to break the black resistance line and continue its move upwards.
Keep in mind the 50MA and 200MA look like they are about to crossover which could lead to some downside so keep an eye on that as well as the potential head and shoulders formation.
If it does break down here, look around 7200 for support at the 0.786 fib level (in black)
In my last update I said if the price can't push higher then there's a chance a head and shoulders pattern is forming. With the right shoulder developing now, it looks more likely to complete.
Right now price is finding support on the 0.618 fib retrace (in red), the 200MA and 50MA (on the hourly TF) and finally the purple support line.
As long as the price can stay above this support, it should be able to break the black resistance line and continue its move upwards.
Keep in mind the 50MA and 200MA look like they are about to crossover which could lead to some downside so keep an eye on that as well as the potential head and shoulders formation.
If it does break down here, look around 7200 for support at the 0.786 fib level (in black)
Comment:
Quick update: Looked like Bitcoin wanted to make another dip, but found support at the .382 fib level (in red). These dips are short-lived and bullish momentum continues to pick right back up.
However, the biggest challenge lies ahead at the $7,800 range. If you switch to a daily view on your charts and place a horizontal line at the 7.8k range you will see how this area has been strong support and resistance in the past.
This price range lines up with the 0.5 fib level (in red) and I expect to see a slight pullback once the price reaches this level.
It’s possible we make another drop first, maybe to re-test that black trend line, but I don’t think we will see a whole lot of downside either way.
However, the biggest challenge lies ahead at the $7,800 range. If you switch to a daily view on your charts and place a horizontal line at the 7.8k range you will see how this area has been strong support and resistance in the past.
This price range lines up with the 0.5 fib level (in red) and I expect to see a slight pullback once the price reaches this level.
It’s possible we make another drop first, maybe to re-test that black trend line, but I don’t think we will see a whole lot of downside either way.
Comment:
Looks like the 0.236 was fairly strong resistance after all, and so far the price is unable to get past 7.7k. This area is also the 0.618 of my original fib drawn in black on the main chart above. This is the third time since May 25th that 7.7k range has been strong resistance.
Now we can see the price touched the bottom of this channel (in blue) and so there’s a chance it bounces here but I mentioned in my last update that the price might come back down to re-test the descending black trend line before moving back up so if this blue channel breaks, we at least have that as our next local support.
If that black trend line breaks, this entire attempt to rally will be seen as a failure and it wouldn’t surprise me to see the price fall down towards the S1 trend line (thick blue line) and possibly bounce there around 7k.
If the black trend line holds, we still have 7.7-7.8k to surpass which will be tough resistance so I’m more bearish currently than bullish.
I wish I had a more clear idea of the direction we are going but it is just so difficult to figure out where the price is going when it’s moving in such a tight range and not really making much progress upwards. As long as volume continues to decrease and price continues to tighten its range, high volatility is to be expected in the upcoming days and that can really help us figure out what direction the market wants to take Bitcoin.
Now we can see the price touched the bottom of this channel (in blue) and so there’s a chance it bounces here but I mentioned in my last update that the price might come back down to re-test the descending black trend line before moving back up so if this blue channel breaks, we at least have that as our next local support.
If that black trend line breaks, this entire attempt to rally will be seen as a failure and it wouldn’t surprise me to see the price fall down towards the S1 trend line (thick blue line) and possibly bounce there around 7k.
If the black trend line holds, we still have 7.7-7.8k to surpass which will be tough resistance so I’m more bearish currently than bullish.
I wish I had a more clear idea of the direction we are going but it is just so difficult to figure out where the price is going when it’s moving in such a tight range and not really making much progress upwards. As long as volume continues to decrease and price continues to tighten its range, high volatility is to be expected in the upcoming days and that can really help us figure out what direction the market wants to take Bitcoin.
Comment:
Update: Bitcoin just fell really hard through the S1 trend lline. This is a big deal because this line made up the support of the huge wedge that we were contained in over the last 4 months. This line was support from November 2017 (5.4k) to the 6k low in February, and to the lows in early April. This is the first time the price has fallen below this trend line since November 2017!!
With that said, we still have a major trend line (S2) that might be able to save Bitcoin. This trend line was formed from the All-time-high (19.7k) down to 17k and 11.7k. It was broken during the April rally and price has stayed above this trend line ever since, so there is still a chance for a bounce!! This price will be around 6k or lower depending on how long it takes to get there.
Personally, I’m not too confident we’ll see a lot of upside even if price manages to stay above this line, however I am going to be looking at the S2 trend line for the next support regardless.
With that said, we still have a major trend line (S2) that might be able to save Bitcoin. This trend line was formed from the All-time-high (19.7k) down to 17k and 11.7k. It was broken during the April rally and price has stayed above this trend line ever since, so there is still a chance for a bounce!! This price will be around 6k or lower depending on how long it takes to get there.
Personally, I’m not too confident we’ll see a lot of upside even if price manages to stay above this line, however I am going to be looking at the S2 trend line for the next support regardless.