AlanSantana

Consolidation vs Distribution | Will Bitcoin Hit Above 30K Next?

Long
BITFINEX:BTCUSD   Bitcoin
Technical analysis is great.

Having these charts available to us is an amazing tool that can help us predict the future.

We can make better trading decisions if we learn to decipher the data/codes coming from these charts.

What is the daily Bitcoin chart saying?
What does Bitcoin has in store in the coming weeks for us?

Please, allow me to entertain you for a few minutes...
Allow your time for me to read this chart for you!


Consolidation vs Distribution

How do we know that Bitcoin is in a consolidation phase rather than a distribution phase?

The recent break above EMA100 is very telling but we can surely go deeper.

Distribution happens when a support level is challenged continually before it breaks.

We have a low set 18-June for BTCUSD that was never tested again.

From 18-June to this day we have 140 and days, almost 5 months and this support level stays safe.

Since the support wasn't tested, not even once...
We can say that Bitcoin is not in a distribution phase but instead consolidation before the next price jump.

From 18-June to 15-August we have the initial corrective wave;
This is followed by a strong higher low that includes the highest volume in multiple years on a single day, 26-September...

With a higher-low and the 18-June support intact, resistance being challenged and conquered in the form of EMAs, we are setup for a higher high on the next wave.

Here is how we find the next potential target using the Fibonacci Extension Tool step by step - CHART:
1- Get the Trend-Based Fib Extension tool.
2- Set the first value as the 18-June low (1).
3- The second value should be the 15-August peak (2).
4- The last/third value the 13-October low (3).

This will give you the Fibonacci Extension numbers which we use as potential targets.

The levels of interest for us are the Golden Ratio which sit at 0.618 and 1.618.

Based on this tool, we can see $22,773 as the first target followed by $30,236 as the next high.

If we want to be more conservative and/or use a different approach; We have $24,000 as MA200 and $28,142 as EMA300.

With these two different tools/methods we can extract a price range for the next Bitcoin target.

That is between (1)$23,000 - $24,000 followed by (2)$28,150 to $30,200.

...
I forgot the rest I was about to tell you because I got entertained doing the Fib. extension explanation/drawing... But it had something to do with the fact that ~5 months is a long time when it comes to Bitcoin and the cryptocurrency market.

It is also a decent amount of time for range trading before we see the market shake things up.

We have many more signals to share but I am guessing that this much is more than enough.

Would you like me to continue?

Let me know in the comments section below.

Thank you for reading.

Namaste.

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