Good morning, traders. The big news yesterday was potential proof that the Mt. Gox trustee was selling Bitcoin on the BitPoint exchange, rather than OTC, through the first half of 2018 (www.goxdox.com/). If so, it could help us understand why price failed to rally strongly enough off the $6000 level and ultimately fell through, after that level supported price for most of the year. But I'm not here to take a side or convince you one way or the other. That's up to you to decide. Instead, we are here talking about price today and it's not looking terrible at this time.
Bitcoin's price bounce off ascending channel support overnight and is now attacking local resistance. There has been a significant fall-off of visible nearby supply on the orderbooks as well. However, we need to see a close above the February 4th swing high of $3439.46 on the H4. After that, we then need to see a close above the February 2nd swing high of $3485. Doing so will open the gates for a run toward $3570 and, of course, the January 25th swing high of $3657.89. If we can see price close above those swing highs, then the next step becomes the January 19th swing high of $3774. That's the step-by-step look for the shorter TF traders.
The H1 chart continues to show volume picking up in the $3385-$3435 area. I am watching for a move through the descending blue local resistance to signal a long target of the $3465 level which is just below the EQ of the ascending channel that price has been printing since January 29th. However, this doesn't mean that price will reach that level. Demand appears to be weak so traders that intent to trade this level are going to have to be prepared for a lack of follow through. RSI is printing a nice ascending channel, so traders can also watch for a move outside of that channel to suggest price direction.
The weekly 200 MA continues to show the support level just below price at around $3300 right now. This TF and the D1 also shows a clearly defined triangle which price bounced off of last week and, with follow through this week, we should be expecting to see a move up to the top of it around $3900-$4000, depending on how long that takes. The D1 descending wedge suggests a breakout to the upside as well. That breakout would provide a target of the top of the triangle, so there is good confluence on that move. A successful push and continuation through the triangle's resistance provides a target of $5200-$5300 based on the width of the triangle. Currently, this is close to the daily 200 MA, again another strong confluence area as it is also a supply zone that was created during the fall from the $6000s. Finally, if price were to hit that supply and remain strong, that would have it above the long-term resistance that dates back to the ATH. Such a move should then indicate a target of just over $15,000 based on the HTF descending wedge that began at the ATH. The D1 RSI has a lot of room to run as it is currently bearishly under neutral at 41 and is attacking descending resistance. It was also most recently strongly oversold (the lowest recorded daily RSI at 9.4) and has yet to return to overbought as we generally expect RSI to move. Interestingly, MACD is also showing signs of bullish divergence between November 27 and January 31, if price can continue to push up from here to confirm that January price point.
The monthly chart is interesting. We can note the large drop from the $6000s in November, however we saw even greater volume in December but a very small candle spread and good lower wick. January saw volume comparable to this past summer, but again small candle spread. This appears to be suggesting that demand continues to show up and while it hasn't been enough to send price higher just yet, if it holds then supply will continue to get eaten up and we could see price moving higher and catching most traders off guard. The M1 wedge is the dominant pattern at this time and based on prior movement suggests that price should be moving sideways/up to challenge the pattern's resistance. This would give price another alternating touch of support and resistance thereby confirming the pattern. If that were to happen, then my expectation continues to be what it has been in that we would see price test that resistance, retrace a bit, and then push through the resistance. Looking at the daily chart, the move toward resistance isn't unthinkable.
None of this guarantees that price will move up, and there is room within the local D1 descending wedge to drop once more. Because the D1 triangle hasn't seen a good rebound off the bottom other than the initial move, price dropping to the bottom of the small local descending wedge doesn't mean a bearish break of the triangle. Rather, it could just be signalling that the bottom is at that lower point if we see a strong move back toward the triangle's resistance. Ultimately, any move below $3300, and prolonged stay there, has me feeling much more bearish.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
Bitcoin's price bounce off ascending channel support overnight and is now attacking local resistance. There has been a significant fall-off of visible nearby supply on the orderbooks as well. However, we need to see a close above the February 4th swing high of $3439.46 on the H4. After that, we then need to see a close above the February 2nd swing high of $3485. Doing so will open the gates for a run toward $3570 and, of course, the January 25th swing high of $3657.89. If we can see price close above those swing highs, then the next step becomes the January 19th swing high of $3774. That's the step-by-step look for the shorter TF traders.
The H1 chart continues to show volume picking up in the $3385-$3435 area. I am watching for a move through the descending blue local resistance to signal a long target of the $3465 level which is just below the EQ of the ascending channel that price has been printing since January 29th. However, this doesn't mean that price will reach that level. Demand appears to be weak so traders that intent to trade this level are going to have to be prepared for a lack of follow through. RSI is printing a nice ascending channel, so traders can also watch for a move outside of that channel to suggest price direction.
The weekly 200 MA continues to show the support level just below price at around $3300 right now. This TF and the D1 also shows a clearly defined triangle which price bounced off of last week and, with follow through this week, we should be expecting to see a move up to the top of it around $3900-$4000, depending on how long that takes. The D1 descending wedge suggests a breakout to the upside as well. That breakout would provide a target of the top of the triangle, so there is good confluence on that move. A successful push and continuation through the triangle's resistance provides a target of $5200-$5300 based on the width of the triangle. Currently, this is close to the daily 200 MA, again another strong confluence area as it is also a supply zone that was created during the fall from the $6000s. Finally, if price were to hit that supply and remain strong, that would have it above the long-term resistance that dates back to the ATH. Such a move should then indicate a target of just over $15,000 based on the HTF descending wedge that began at the ATH. The D1 RSI has a lot of room to run as it is currently bearishly under neutral at 41 and is attacking descending resistance. It was also most recently strongly oversold (the lowest recorded daily RSI at 9.4) and has yet to return to overbought as we generally expect RSI to move. Interestingly, MACD is also showing signs of bullish divergence between November 27 and January 31, if price can continue to push up from here to confirm that January price point.
The monthly chart is interesting. We can note the large drop from the $6000s in November, however we saw even greater volume in December but a very small candle spread and good lower wick. January saw volume comparable to this past summer, but again small candle spread. This appears to be suggesting that demand continues to show up and while it hasn't been enough to send price higher just yet, if it holds then supply will continue to get eaten up and we could see price moving higher and catching most traders off guard. The M1 wedge is the dominant pattern at this time and based on prior movement suggests that price should be moving sideways/up to challenge the pattern's resistance. This would give price another alternating touch of support and resistance thereby confirming the pattern. If that were to happen, then my expectation continues to be what it has been in that we would see price test that resistance, retrace a bit, and then push through the resistance. Looking at the daily chart, the move toward resistance isn't unthinkable.
None of this guarantees that price will move up, and there is room within the local D1 descending wedge to drop once more. Because the D1 triangle hasn't seen a good rebound off the bottom other than the initial move, price dropping to the bottom of the small local descending wedge doesn't mean a bearish break of the triangle. Rather, it could just be signalling that the bottom is at that lower point if we see a strong move back toward the triangle's resistance. Ultimately, any move below $3300, and prolonged stay there, has me feeling much more bearish.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.