Important Facts on The State of Bitcoin! Don't Miss This! (BTC)
Hi friends! Welcome to this update analysis on Bitcoin! Let's get right to it! Looking at the daily chart, you can see that the breakdown below the rising black trendline is sustained. This is technically concerning, but I have noticed that several of my followers did not seem to recognize the importance of this event. Perhaps it is due to the fact that my charts were zoomed in too far for people to see the actual points of contact on the trendline, but nonetheless, I will explain why this is concerning price action.
We all know that there are rising trendlines, falling trendlines, and parallel trendlines. In terms the current bull/bear cycle of Bitcoin, the rise to the all time high produced several pivot lows. Those pivot lows can be used to create rising support lines, to gauge the sustainability of a longer-term bullish continuation, or a turning point in the bear market. As you can see, the two points that create the rising black trendline are the lowest pivot lows that are relevant to this cycle. In other words, that was the last hope for rising support. Sure, there are other parallel and descending trendlines in the mix, but for a gauge on a bullish continuation, this black trendline is pretty significant. Now that it has been taken out, some significant technical damage has been done. That's not to say that BTC won't continue to form a bowl-like structure, which it appears to have half way formed already (meaning we could be bottoming soon.) However, the deeper technical picture tells a more bearish story.
First of all, if we look at the descending triangle, the height of that triangle (black dashed vertical trendline) can be used to gauge the full potential of a breakdown. This is common price target analysis. I actually published an analysis on this months ago, but if you subtract the height from the potential breakdown area (below the triangle) you see that the triangle is large enough to TECHNICALLY produce a fall to zero. Now, I'm sure a million people will get their panties in a bunch when they read that, but it's just a fact of price analysis. Fundamentals aside, if you look at the size of that structure, it is definitely large enough to produce a complete meltdown. I'm not saying that will happen. I'm just showing you the technical red flags, that shouldn't be ignored.
Furthermore, BTC remains in a clear bear market downtrend. Lower highs, lower lows, failures at all major moving averages, and not a sign of relief in sight. I see so many analysts calling for the moon from here, but without even a solid higher high on the chart, or a hold above critical moving averages, I don't see how they can even call themselves analysts. But, that's neither here nor there.
On the plus side, we haven't closed below the triangle yet. You can see that the bottom of it was pierced, which weakens the bottom of the triangle as support, but it hasn't truly been taken out yet. If the bottom of the triangle is broken, the next stop will be $4970, at the 78.6% retrace. A break below there would likely send us to $4492, and then below that we would see a massive slide to $3000. Those levels are the dominoes. Once one falls, in this stage of the game, it wouldn't take much for panic to consume the market. According to volume, most people in this market have been in from the highs. Who are those people? Mostly novice retail investors, who have watched their investments get destroyed. So, if things really start to crumble, they could easily panic sell — desperate to save the small fractions that remain in their accounts.
On the MACD, we can see that there are two main ways of drawing the bullish divergence. No matter how you slice it, pink line or blue, the bullish divergence has now been broken. Now, divergences can produce effects slightly later in the market, but it is definitely noteworthy that the momentum support was broken. Most recently, it was broken decisively. With that said, BTC and the entire crypto space are obviously treading on thin ice. The bulls need to rally back above the rising black trendline, and ESPECIALLY the 50 EMA, to turn this thing around. Until that happens, I will be in "sell the rallies" mode. To be clear, I have absolutely no interest in buying, until BTC can hold support above the 50 EMA (in orange,) or until we see a violent capitulation selloff with a subsequent recovery in the market.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
We all know that there are rising trendlines, falling trendlines, and parallel trendlines. In terms the current bull/bear cycle of Bitcoin, the rise to the all time high produced several pivot lows. Those pivot lows can be used to create rising support lines, to gauge the sustainability of a longer-term bullish continuation, or a turning point in the bear market. As you can see, the two points that create the rising black trendline are the lowest pivot lows that are relevant to this cycle. In other words, that was the last hope for rising support. Sure, there are other parallel and descending trendlines in the mix, but for a gauge on a bullish continuation, this black trendline is pretty significant. Now that it has been taken out, some significant technical damage has been done. That's not to say that BTC won't continue to form a bowl-like structure, which it appears to have half way formed already (meaning we could be bottoming soon.) However, the deeper technical picture tells a more bearish story.
First of all, if we look at the descending triangle, the height of that triangle (black dashed vertical trendline) can be used to gauge the full potential of a breakdown. This is common price target analysis. I actually published an analysis on this months ago, but if you subtract the height from the potential breakdown area (below the triangle) you see that the triangle is large enough to TECHNICALLY produce a fall to zero. Now, I'm sure a million people will get their panties in a bunch when they read that, but it's just a fact of price analysis. Fundamentals aside, if you look at the size of that structure, it is definitely large enough to produce a complete meltdown. I'm not saying that will happen. I'm just showing you the technical red flags, that shouldn't be ignored.
Furthermore, BTC remains in a clear bear market downtrend. Lower highs, lower lows, failures at all major moving averages, and not a sign of relief in sight. I see so many analysts calling for the moon from here, but without even a solid higher high on the chart, or a hold above critical moving averages, I don't see how they can even call themselves analysts. But, that's neither here nor there.
On the plus side, we haven't closed below the triangle yet. You can see that the bottom of it was pierced, which weakens the bottom of the triangle as support, but it hasn't truly been taken out yet. If the bottom of the triangle is broken, the next stop will be $4970, at the 78.6% retrace. A break below there would likely send us to $4492, and then below that we would see a massive slide to $3000. Those levels are the dominoes. Once one falls, in this stage of the game, it wouldn't take much for panic to consume the market. According to volume, most people in this market have been in from the highs. Who are those people? Mostly novice retail investors, who have watched their investments get destroyed. So, if things really start to crumble, they could easily panic sell — desperate to save the small fractions that remain in their accounts.
On the MACD, we can see that there are two main ways of drawing the bullish divergence. No matter how you slice it, pink line or blue, the bullish divergence has now been broken. Now, divergences can produce effects slightly later in the market, but it is definitely noteworthy that the momentum support was broken. Most recently, it was broken decisively. With that said, BTC and the entire crypto space are obviously treading on thin ice. The bulls need to rally back above the rising black trendline, and ESPECIALLY the 50 EMA, to turn this thing around. Until that happens, I will be in "sell the rallies" mode. To be clear, I have absolutely no interest in buying, until BTC can hold support above the 50 EMA (in orange,) or until we see a violent capitulation selloff with a subsequent recovery in the market.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Comment:
I was saying "parallel," but meant to say "horizontal."
Comment:
In reference to the trendlines.