As July comes to an end let’s look at where Bitcoin is in the longer term. Where are we in the bear market? Is the end in sight? Or have we perhaps bottomed already?
Let’s consult our oracles, the charts.
Monthly
Here we have the monthly chart, starting in 2012. We see fib retracements of the two big moves, and support and resistance areas. Firstly, let’s not worry about trend for the moment, but only look at the key levels. A significant level to pay attention to is the area around 1350-1000. This is a previous resistance that was broken, but never retested. This is of extreme importance, this level will act as a magnet for price: price will want to go there to test it. Now, that doesn’t mean price will necessarily reach that area, but it will want to head in that direction. A key level to break before reaching that is the area around 5000: a less significant resistance that was broken, but also never retested. This is the first level price will try to reach out to. Second let’s compare the 2014 correction to where we are now. We can see that in 2014 the correction took us past the 0.786 level, reaching out to the .887 level. We are now around the .618 level, so we may have some more down to go. Finally, let’s see where we’ve bounced. This is an area that has not really been resistance before, but is somehow violently being defended by the bulls. This is somewhat concerning, as it is clearly no structural level of support or resistance. Perhaps it may be a pure emotional level…?
Let’s look at what ichimoku can tell us on the monthly chart.
We’ve left the kumo off the charts, as there’s really too little data for it to be of use. What we can see is that price moved below kijun, and has been unable to break through it since. Tenkan is still above the kijun, but we can predict it crossing over in the next two months if we don’t make new highs (which is not very likely is it..). Kijun will also remain flat for some time, allowing the tenkan to cross over. Take note of the key levels again, and let’s look at the weekly charts so see where we can expect a next reaction
Weekly
Here’s the weekly chart. Take some time to look at it, as there’s quite a bit going on there. Let’s break it down. First of all, there’s the key levels of 5000 and 1350 to be aware of. Second, we’ve identified a huge cluster of resistance, from around 8800 to around 11500. Thirdly, we have this area from which price reacted a number of times for no apparent reason, the area around 6000. We suspect these reactions to be short squeezes, followed by horrendous fomo-trading. Getting to around this area again will be a good sign for disaster.. Now, knowing all this, where are we? We can see price lingering around the top of the channel, flirting with entering that intimidating area of resistance. We don’t see the bulls having enough steam at the moment to push too far into that, and we’re waiting for a violent drop down. Before we truly test the 5000 area we don't see the bear market over yet. We’ll have to see how the coming weeks play out, and how we can position ourselves in the market accordingly.
We have a short term trade scenario developing (see the links below), for possibly one more swing up, and then down. Follow us to stay updated on that, we’ll do a weekly update discussing that on monday, as always :)
Stay happy, and see you tomorrow
Comment
⋅
Comment
⋅
click on the image above for this weeks market update where we look at bitcoins more immediate moves and how to position ourselves in the market in a risk averse manner!
Comment
⋅
We've updated yesterday's scenario with a more specified trade setup. follow this post to stay updated on how the setup develops
@riskmode, These charts are in a logarithmic scale.
Bateman76
⋅
2013-2014 is a bull market on the monthly with 1 small retracement, but why is that retracement not coming down more? Because it had an emotional holdback, like now.. we are not going down more but buildinga base here..
DariusZen
⋅
@Bateman76, @Bateman76, Maybe.. I don't like to approach trading in absolutes, trading is only probabilities and risk. There's a chance we're 'building a base', but I can't see that in the charts.
Perhaps you are right, and I hope so, but I can't ignore what the charts tell me. There are untested levels, and untested levels are magnets for price. Like I said, I'm not saying price will reach them, just saying price will want go there. I am prepared and have a plan for both situations, and that is what trading is about to me. Shouting moon and bottom and every bounce will make you right eventually, but wrong far more often (I'm not saying you do that though, just what I'm seeing in general in this crypto space).
If price does somehow hold this level, I'll adjust my trading accordingly. Don't get married to a prediction/scenario/direction.
Then again, I'm hoping for you to be right, I'll gladly be wrong in this situation!
Bateman76
⋅
@zentrading_, thanks for taking your time writing a long answer. I think that this ETF fud/fomo factor outcome is unknown for us until we know the decision and see the communication. IT can give BTC wings or cut them off in a few minutes.
DariusZen
⋅
@Bateman76, Perhaps, but I don't share this view. No real news has actually ever driven the price up in my opinion, however, rumours have sent the price skyrocketing. Crypto is a market of buying the rumours and selling the news.. A vast majority of the 'traders' are actually just gamblers overreacting on any hint of possible news. Even if a rumour turns out to be true, or in this case, the decision to be positive, the expectation of the price increase which that will cause will still be way higher than the actual immediate effect. I mean, even if they approve, don't expect an ETF or ETP to be available before somewhere next year. Because the expectation will be far higher than the actual effect, there will be selling, not buying..
My views though, I could be very wrong, but I don't think I am ;)