botje11

Bitcoin making a double Double top

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
As you can se here i have put both the high from past 2 weeks next to each other. We can see the moves are a bit similar as well. The waves and the shape it has right now.

The stop hunts on the left have become clear in hindsight, since we took a 1500/2000 point dive think there is no doubt about that assumption. Past days it looks a bit like we have seen a similar move. We do miss out on another clear stop hunt around 8300, but i have placed the second green at yesterday's high.

Assuming this double top theory is correct, we should not get above the 8100ish anymore, actually not even above that blue trend line actually. If this plays out and we drop again, the same scenario's as mentioned in my previous analysis are in play. That is:

1) Making a real double top with the neckline around 7000 giving a target around 6000
2) Making a triangle, so bouncing up again from the 7500/7600 zone.

The 7700 seems to be the key support level now. If that one breaks and we see a high volume panic break of the support, the triangle version will probably fail. If we see normal volume , as we can see the past days with the 200/400 point drops, than we could see it turn up again. So volume is probably the best indicator here to follow in case we drop below the 7700.

In the middle we can see that wedge which was the start of that big short squeeze rally back to the 8K's. It's support was at 7200. No assuming this short squeeze was forced, we can assume that if this level breaks, it will be a sell sign as well. Because there was good support there, so we should see the same people buying it up once again. So my assumption is, that if that 7200ish breaks, it will confirm the short squeeze rally was manipulation (to short at the highs) and that we will dump even more.

About the triangle, it's always important to see several touches of the high of a triangle formation. The move to 8300 can be seen as a touch of the triangle. So, if the market is able to break the 8100ish again and once again touch the 8300/8400, the triangle version will become more likely as well. I personally think it would be too soon to see it move up to 8400 within the coming day or 2. Think it would be much better to make another higher low first around 7500/7700 and then slowly attack the resistance again. So in other words, even if we see a bullish outcome coming weeks, it should take another few days before we really break up.

Now it's easier to look down (at least short term), as long as we stay below the 8100ish. If this level breaks, doesn't mean we will simply go up, but see it as neutral ground then and that the double top analysis will become less likely.



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Previous analysis:
Comment: Was a strange move earlier today, where a 10 mil market buy on Bitmex which triggered the market to squeeze up almost 200 points even. It was a bit odd, even more because we simply dropped again shortly after. Anyway, the resistance zone around 8050/8100 did it's work and we have even touched the 7500 just now. At the moment we are seeing another decent bounce up, already 230 points up from the low.

On the right we can also see it bounced up precisely from the triangle support line. Keeping the triangle still alive at this point. As long as we stay below the 7800/7850, chances for an even bigger drop are still higher. If the 7850ish breaks, bears will still be slightly in favor. Above 8100ish we can think the bulls are in favor again.

Usually, to see if the triangle is real, it's better to see another retest at least. So better to just go back up to 8000. See it as if the market wants to double (or triple) check if the support is real before going up again. If it just goes up from here, it could be just shorts taking profit again, which isn't the best foundation. Just look at some triangles (no matter which asset) on similar time frame and you will see what i mean with this.

So i think, the bulls want to see something like the blue line. The bears simply want to see a bear flag and the 7500 breaking

Comment: Following the blue line to the point so far. But this can just as easily be a bear flag. So, for the bulls:

The first red needs to break quickly and the one around 7800/50 as well eventually. This last one is an important one for the bulls.

For the bears:

If it stays below the first red zone around 7700, it can easily drop again. If we see it drop towards the low again without even breaking the 7700 first, it will become very likely to see the support around 7550/500 break and seeing it dump even more.

If the bulls can prevent a drop and keep price inside the triangle for like another day or so, then we could see it bounce up eventually. So short term, bears are clearly in favor

Comment: Extra Bitcoin analysis, bigger picture:

Comment: So it's like a moment of truth coming day or so. Bounced up from that support of the triangle and so far it looks to be doing okay. However, volume is not really great of this move up. It's still inside of the consolidation, but i think it's still too low for what it should be if we would see a real attack to break up from the triangle.
Also that curved line on the left might have some weight on the market as well. So a break of 8000 will be a decent step for the bulls. The 8100 is still an important level to break. If that one breaks, chances will increase for the bulls.

Also have a small channel of this move up today. But even if it breaks, there is room for a higher low around 7720/60. A break of that level won't be any good for the bulls.

So bears are still in favor and will be as long as we stay below the 8100ish.

Comment: Bulls are holding it so far. Break of that channel got turned into a small wedge. Volume also increased with this last push. So to be honest, at this point it's less clear if the bulls or bears will win this fight of the 8100ish resistance.

Some alts have improved but from my small list more are still behind. Also seems we have that curved blue line as well now, something to watch. Only real sensible thing i can say is, that if the 8100 breaks, we need even more volume. Should reach the orange circle on the left chart. Otherwise it would not feel good and real enough for me. First support is around 7900 now and i think a more important one at 7800.

Comment: New Bitcoin analysis:

Comments

Taking a look at Bitcoin on the Monthly time frame, this chart remains 100% bullish:
+10 Reply
Thanks for your analysis! Seems logical, still we all should understand that every time after double top BTC fell down hard. If you check this comparison, you'll understand:
+6 Reply
@MichaelEssing, Yep double top + break of ascending triangle = bears moves inbound.
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buff0n MamboNY
@MamboNY, lol
+1 Reply
scripter MamboNY
@MamboNY, nice layout...may i ask what your using? Thank you.
Reply
scripter MamboNY
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Nice drawings as always :)
My bias is based on the breakout from the triangle. Pretty clean confirmation areas and soon, we will see action because the triangle tip getting closer and the triangle tip has guided the BTC price into the big explosions:

All the best!
+4 Reply
@VaidoVeek, If you draw the lines properly, we're looking at an ascending triangle, not a symmetrical one.
+2 Reply
Very accurate stop hunt representation David. In my opinion this is purely an Inverse Head and Shoulders pattern which is near breaking a pivotal support. The selling can easily escalate to 7000 - 6870.

+3 Reply