Hey everyone. I've been wanting to make another GOOD chart for you guys for a while now. Lately I've been so busy working and just too tired to go all out and publish charts as frequently as I would like. I've been trying to at least post quick market updates and important levels to watch via Twitter to hold you over. Anyways, hopefully everyone is well and getting one step ahead of the market! IT'S VERY HARD to do. I get so upset sometimes seeing people on YouTube posting elementary level analysis and they have thousands of gullible followers getting liquidated over and over. I get it, if they're that gullible and want to watch YouTube videos thinking they've found the key to financial freedom well then lets just say they have A HARD LESSON to learn up ahead. I always advise anyone and everyone to learn about cryptocurrency. Yes it takes quite a while to just TRULY UNDERSTAND it and compare it to todays financial systems but it's worth every single second. In other charts I've mentioned that understanding the fundamentals will really give you an edge in the markets especially in times when a reversal may be likely coming. In those rare moments, the fundamentals out-weigh the technical analysis. Those are the moments where the technical analysis looks very bearish and may be showing further downside potential BUT bulls step in and say "enough is enough!" "I personally value this coin (BTC, ETH, ADA, DOGE, SHIB, ect...) more than its current price." YOU NEED to completely understand the technology and potential it has in order to put a price tag on it. What is it worth to you? Without looking at a chart at all, WHAT are you willing to pay for a certain crypto/stock/gold/house? I encourage anyone and everyone to dive in. You'll just end up going deeper and deeper down the rabbit hole exploring and learning. PERSONALLY, I ENJOY IT! I also have a strong passion for helping people. I honestly am seeking a job in the cryptocurrency field. Whether it's as a journalist writing articles, a crypto market analyst, or even helping companies by creating a system for their business to accept cryptocurrency as a payment, I LOVE EVERY BIT OF IT! Mark Twain said "Find a job you enjoy doing, and you will never have to work a day in your life". I find this quote to be very true. Well, that's enough for the long introduction. Lets go over the chart below.
As you can see, bulls have been struggling to get above this resistance area (the 0.5-0.618 fibonacci retracement level from the 43.5K drop) Take note of the RSI and the fact that It's not yet in the "overbought" area. This suggests that bulls CAN still push above the resistance before a pull back. Personally, I don't think that is the most likely scenario though, although it remains in the cards as a POSSIBILITY.
To the left you'll see a "fibonacci key" which basically shows you how I identified BTC's current support levels. If BTC does pull back, we would look for support at these levels. The higher the better! Most recently, BTC bounced off of the 0.618 level where the potential "left shoulder" is marked. This is generally a good thing. ( the 0.786 is the best level {not shown}, the 0.5 is OK, and the 0.382 is basically the last support for an upside continuation). Looking at these levels, we can see that BTC has plenty of room to pull back while still being able to continue the overall upwards move. The yellow line is an idea I think could play out and It would likely give bulls the strength needed to get above the resistance area, and hopefully turn it into support. If this Idea does start playing out, It would potentially create a "head" to go along with the "left shoulder". After that, the potential Inverse H&S will become more obvious to a lot of traders and I'd say there's a better chance of it playing out completely at that point. It's very common to see an inverse head and shoulders pattern near a bottom/trend-reversal area and that is why I'm looking for one as I think in one way or another, it's very likely. If BTC does manage to create a VALID Inverse H&S pattern, I think it would very likely get us above the resistance! This is the path I prefer
If BTC does pull back and somewhere along the way drops below the 0.5 fibonacci support level, then bulls will be in a bit of trouble. A quick-wick down is ok but any type of lasting move downwards below the 0.5 support level would be a sign of weakness. There is still the 0.382 support level technically but usually if BTC bounces off the 0.382, it's very short-lived and gets back above the 0.5 rather quickly. the 0.382 is good for a quick wick but not for long lasting support. The red line shows a situation like this playing out where BTC drops below the 0.5, tries to bounce back above it once or twice but overall bulls would be very weak here and this would suggest that BTC will head down to the previous low near 33K to retest the area! If bulls do manage to bounce at the same level as the previous low, it would create a double bottom. A double bottom is a very good pattern to trade and usually signals at least a temporary bottom for a relief rally, OR POTENTIALLY a macro bottom where bulls take over and a macro trend reversal takes place. That situation would likely lead to new all-time-highs or at least a test of the previous all-time-high.
To confirm a major trend reversal, first BTC must break above the resistance area and create a "higher-high". Then when BTC pulls back we need to see the previous resistance turned into new support. This would create a "higher-low" to go along with the "higher-high", confirming at least a temporary trend reversal.
This chart shows what I BELIEVE is the more likely set of scenarios that could likely end up playing out over time. (the next week or two) There ARE OTHER possibilities though that you should be aware of. Instead of an inverse head & shoulders bottom, We could see a "bump-and-run" type situation play out. This would be my 2nd pick for the most likely situation to play out. A bump-and-run would likely require BTC to make a lower-low, probably even below 30K! A bump-and-run starts with a very sharp drop followed by a big bounce. The bottom does not get retested and there are no major pullbacks but instead, price climbs up higher and higher, eventually passing the area of the original drop. If you'd like to see an example, look at the "COVID dump" from March 2020 to middle of MAY 2020. In previous BTC charts I've published, (I'll leave links to them below) you can see that I've been showing the possibility for BTC to drop down to the 20K area. AS OF RIGHT NOW, I don't believe those situations are as likely HOWEVER I CAN NOT rule them out completely. I feel that this is a good area for at least a temporary bottom as BTC hit the downside targets shown in my "wolf waves" analysis. (link below) I've also had my eyes set on the 34.5K area for months now as my loyal followers know. I APPRECIATE ALL OF YOU GUYS!
A major news story can absolutely turn the tides either way. An extremely bullish news story could potentially blast BTC back up to 60K in a matter of days! The opposite is also true where an extremely negative news story could cause BTC to drop to 20K or even below 20K in a matter of days! THIS IS WHY STOP-LOSS ORDERS ARE EXTREMELY IMPORTANT. I can never say that enough... STOP LOSS ORDERS ARE EXTREMELY IMPORTANT!
Well, that'll be it for this analysis. I hope you guys like it or at least find it interesting. I do it for you guys, and everyone/anyone who's willing to look and read a bit. It's what I enjoy doing and I honestly have put in countless hours, days, months of research to learn many of the things I share with you guys. Honestly, I wish I had more free time to make even more but eventually we'll get there!
If you enjoyed this PLEASE LIKE, FOLLOW, and SHARE. I want to help more people if I can so sharing is VERY APPRECIATED. I really do appreciate everything including COMMENTS. Please feel free to COMMENT. Sometimes I may not be able to respond right away but I always do update my charts (especially in relevant situations where the market can potentially shift) so be sure to check for updates I've posted
***THIS IS NOT FINANCIAL ADVICE! This is an just an idea and speculation based off of my experience researching cryptocurrencies. I Always recommend doing your own research before trading or investing in anything.***
Comment
⋅
Well that particular Inverse H&S pattern is messed up now for the moment. Bulls look strong and are holding the line but bears are strong. Volume has been picking up quite a bit. If we do end up getting a decent pull back to one of the support levels then a new Inverse H&S pattern could start forming... IF BULLS can blast above this resistance then we could very well see the bump-and-run scenario play out without a lower-low. The low would be the 33K area. This idea is also lining up with my previous ideas. Time will tell. Important updates will come as necessary.
Comment
⋅
I'm still looking for an inverse-head-&-shoulders pattern to signal that bulls have the strength to get above the resistance area. Here is a snapshot of another upcoming POSSIBILITY. NOTHING IS CONFIRMED AS OF NOW.
ON THE OTHER HAND... I was analyzing some chart data yesterday and LETS JUST SAY BULLS HAVE TO HOLD ABOVE 35K and if they don't, A 20K BITCOIN will be looking MUCH MORE LIKELY than it is right now. The data DID HOWEVER show that there has been MORE bullish buying power at 35K-40K area than BEARISH SELLING over time. That is somewhat a good thing and some hope of a trend reversal.
BUT... If the 35K level breaks then we could be in for some massive dumping and it will likely take place over a much longer period of time. The current narrative of "Will BTC reach 100K by 2023?" will turn into "Will BTC bottom out by 2023?"
Trade closed: target reached
⋅
No need for Inverse H&S pattern here. BUT the general IDEA of upwards was right! Congratulations to everyone and anyone who don't just disregard my analysis's. We're in the profit right now and big time! I THINK we may have caught the macro bottom with that "wolf waves" chart I made. I knew there was a good reason to make it with different colors LOL! Thank you guys for following me and you guys know I've been calling A 34K bottom for months now. LETS NOT GET AHEAD of ourselves though and ALWAYS REMEMBER that it's not profit until you sell it for profit. Let's put what we've learned into action. We know that TAKING PROFITS and CUTTING LOSSES are 2 of the most important lessons. From early looks at our current position I THINK there may be a decent chance that BTC drops BACK DOWN to about 37K ESPECIALLY FROM THIS AREA! Watch out for a head and shoulders pattern on the smaller timeframes. The other scenario is that BTC makes a bull flag and puts another leg up! Lets see how the weekend goes and hopefully I have another analysis for you guys soon. Once again, THANK YOU ALL for the likes, comments and shares. We're just getting started here!