After a huge run today, Bitcoin is going to need to cool off a big and I am expecting a slight retrace.
Right now the price is at a level of the highest trading volume since October 2017, and the only other levels with higher trading volume are at the 4.2k and 2.6k levels.
The price also just hit the 0.618 Fib retrace from 5.7k up to 10k.
Looking at the weekly view, the price has just touched the 50MA and hasn’t pushed past this moving average yet.
Stochastic is oversold on the daily view. RSI is oversold on daily. There are bearish divergences on 4hour on the RSI, CMF, Stoch, and MACD.
The downtrend line above has been breached, but let’s see if this is just a fake breakout once the daily candle closes.
I opened up a small short position just under 8,300. I will keep my stop loss above 8,400.
This is a risky trade with all the FOMO going on right now, so make sure you open a small position and only spend what you can afford to lose.
Please give this a thumbs up if you like this idea!
Right now the price is at a level of the highest trading volume since October 2017, and the only other levels with higher trading volume are at the 4.2k and 2.6k levels.
The price also just hit the 0.618 Fib retrace from 5.7k up to 10k.
Looking at the weekly view, the price has just touched the 50MA and hasn’t pushed past this moving average yet.
Stochastic is oversold on the daily view. RSI is oversold on daily. There are bearish divergences on 4hour on the RSI, CMF, Stoch, and MACD.
The downtrend line above has been breached, but let’s see if this is just a fake breakout once the daily candle closes.
I opened up a small short position just under 8,300. I will keep my stop loss above 8,400.
This is a risky trade with all the FOMO going on right now, so make sure you open a small position and only spend what you can afford to lose.
Please give this a thumbs up if you like this idea!
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Massive 4 hour divergences on RSI and MACD
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So after publishing this idea, Bitcoin had one more bullish move up towards the high of 8500 right around where the 200MA on the daily time frame was coming down. I held my short knowing it would retrace soon with all the bearish divergences showing up and a weakening of the CMF, as well as the 200MA on daily overhead. Now we have retraced a bit back down towards the 50MA on the weekly and that is where the price is currently resting. It looks like we are forming a bear flag on the hourly and I expect price to reach the 7.8k-8k region. I doubt the price will fall much further than this right now, as bullish sentiment is very high at this time. But I will update if anything changes!
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So we got the second drop I was expecting out of the bear flag, I am now up +400 pips on my short from 8,300. Right now the price seems to be finding some weak support at the 0.5 fib level but I think it will continue down towards the 200MA (in orange). That price level is a stronger support than the current level based on price structure and volume. I am expecting price to reach around the 7,750 range and continue to move up from there. I will close my shorts at the price, however I have also moved down my stop loss to just above 8,000 to be safe as I am not expecting a large fall just yet (still think we’ll have one more leg up to previous high or higher). From there I will be looking for stronger reversal signals for a longer-term drop.
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Got another big drop today, it's currently finding support at the 89EMA (pink line)on the 4 hour time frame. If that doesn't hold as support, I’ll be looking at the 7.3-7.5k range where there is a much stronger support zone. This is at the 0.382 fibonacci retracement of 5.7k up to 10k, but it’s possible the price finds support around the black trend line that was formed from 5.4k to 6k to 6.5k just above this which is why I am targeting a range for support rather than a specific support level.
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Price dropped even more overnight, this short ended up being a great call :) Now we can see the price wicked down to the 89EMA (in pink) on the daily time frame and is also finding support around the 100MA (purple). I still think we will see a little more movement down towards the 0.382 but I will wait for clearer signals before making another trade. There is possibly a harmonic pattern forming right now, but I won’t post that idea until I see the price get closer to Point D which would be right around 7,400.
For now I am flat and waiting for reversal signals.
For now I am flat and waiting for reversal signals.
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So that bat harmonic that I mentioned in my last update might be in play here. This could be the end of this drop (at least for now) and if that happens the bat harmonic will most likely work out. Here is the link to that idea:
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New update:
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This short idea is still going strong! Price has fallen from 8,500 to 6,500 since I made this call a week before the drop. Let's see if it ends up testing the 89EMA again (shown in pink in original chart above) in the upcoming weeks, but it has more support areas to get through first.
Here is the next local support I'm expecting price to reach
Here is the next local support I'm expecting price to reach
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Quick update: Bitcoin fell below the 0.768 rapidly but the bulls have been trying hard to get price back above this level. Unfortunately for the bulls, it’s now simply being tested as resistance and they are having trouble breaking this fib level. We’ll see what happens in the coming hours or days but downside seems more likely right now. If that happens, the next support is the 5.7k low that marked the reaction low prior to the entire July bull run. That support is relatively weak so I wouldn’t be surprised if that breaks too. I’ll try to keep you updated as things change.
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I want to follow up on my last comment. There is a relatively strong support defined by the 89EMA (shown in purple) on the weekly. This support held Bitcoin in June so let’s see if it’s able to hold again. So far the price hasn’t been able to break below this moving average.