I am happy to share with you my next idea about BTC price dynamics. While everybody is looking to potential rally to 14K and 16K levels we do not have to underestimate the gravity of the current situation.
There are several major concerns that I have with the current upwards rally and which makes me think that even if we hit 13 and 14K levels sometime soon, we will give all these gains back rapidly unless some of the technical and environmental factors are met. So I'll be brief:
Cause for concerns:
1. We have not tested 21 weekly since February, and this is concerning because ever since the inception of BTC trading and drawing of the weekly lines the 21EMA has served as a centre of gravity for the BTC price and overall trend. We are long overdue in this test and I will not feel comfortable with the upwards continuation unless this crucial reality check is performed.
2. Despite all the hype and media coverage of the BTC in the months of July and August /19 there has been no significant move in the trading of BTC , which means that players with small financial resources are driving the price which presents risk for small scale retail investors since they can liquidate their positions fast and will not face significant resistance in the process of doing so.
3. Google Trends data shows that we are still at 15 on 5-year scale and have not made new highs, in fact, we are still 1 point lower than the modest result of July 14Th/19 standing at 16 points. This drives me to a sad realization that there are not many retail investors currently coming in the BTC trading/investing space and most likely it will take a little bit of time and development of international economic events to create incentives for new retail investors to come in.
4. We have not tested 50 on 4Hour following the golden cross. Like the weekly 21 , this moving average has a massive gravitational pull and an even bigger push for the upwards moving price trajectory in the upwards trending markets. I am not saying that we have to test it 100% but if we dont then we have to have other technical drivers in place that might have equal or a greater push potential as 4H 50EMA.
5. Gap at 8500 level - This is BS theory BTW and holds no water. But if it enough people believe in it, it becomes a RELIGION and most likely will drive the sentiment to complete the self-fulfilling prophecy.
All these said, BTC has several massively events in line that in shorrt term might overrule all the concerns and worries that I have listed above and might buy some tome-like 3-5 weeks for mentioned moving averages to trail higher and gain roughly 800 to 1500 $ points from their current position.
1. 200 and cross is coming on 4 hours and most likely will complete in the next 12 to 18 Hours. The fact that we are trading far away from the cross makes me think that the price action could potentially already account for the event (expected boost has already taken place), however I will not be surprised if this event will create additional 3-5% upwards push of the price in the immediate term as well as during the week-end.
2. Traditionally, the time before the 200 and cross has been accompanied with the test of 50 on 4H, which presents a nice buying opportunity before the cross. We might breach 50 , but I believe that pullback will be just as swift as well.
3. Monthly exiting the bearing control zone. Weekly moving comfortably over 50 mark line. Daily, 2 Day and 3 day RSIs all indicate momentum.
Summary, in the immediate term, look at 50 on 4H and identify good buying opportunities for upcoming 4H 200 EMA-SMA cross. Enjoy your gains while they last and look out for massive pullback during the week-end because the cross has incredibly high gravitational pull and will close most of the gains before the early parts of the next week. As soon as the market starts going sideways on the lower timeframes exit and secure your positions.
Do not short - We are still in the general uptrend and shorting is associated with higher risk and lower reward in this situation.
Stay safe and have a great gains owe the week-end.
Archie, the CryotoToad!