Hi friends! Welcome to this update analysis on Bitcoin! Let's get right to it! Looking at the daily BTC chart, you can see that price has sustained three healthy days up. Although, today's candle is far from closed, BTC is currently marching higher. If you recall from my previous analysis, I said that a test of the 50 EMA (in orange) is likely, which would put BTC somewhere in the low 4000s. However, BTC is currently trapped inside of a downtrend channel (in pink.) So, before a test of the 50 EMA, BTC will have to contend with the top of this downtrend channel. Obviously, if BTC fails there, then the 50 wont be tested just yet.
You can see that I have the three most recent candles circled on the chart. That's because (if today closes near the highs of the current candle) it will fulfill a bullish candlestick pattern known as the "three white soldiers." The three white soldiers candlestick pattern is typically generated on a low in the market (not saying this is the bottom) and it has three large candlestick bodies that have relatively small wicks. This candlestick pattern reflects an immediate and sustained reversal in investor sentiment. That narrative makes sense, since the market was so close to $3000. I think sentiment had changed at that point, and investors saw value in the crypto space. However, we still have the top of the downtrend channel to deal with. Interestingly, the three white soldiers pattern can produce a red day after the third candle in the pattern (today's candle) and then resume a powerful move to the upside. Such a move would cause a breakout above this downtrend channel that we are in, and a test of the 50 EMA.
Personally, I am really interested in seeing a test of the 50 EMA. That's the REAL test right now. If BTC can get above the 50, and hold it as support, we could go much higher. Particularly, we could see a rally up into the "major overhead resistance zone." So, from a market psychology standpoint, we all know that we had a major breakdown from the 6000-5775 level. However, the market never really returned to test and confirm that area as resistance. If you remember from my previous analysis on that breakdown, I gave you the first bear flag, which I have up on the chart right now. We did form a bear flag under the resistance, but we never physically touched it and tested it. The market just formed a bear flag below it and dumped. So, if this thing picks up steam, we could definitely see a test of the 5775 level.
Would that mean that the bear market is over? Absolutely not. In fact, if we rallied to 5775, and got rejected at it, that would be an extremely bearish indicator, most likely leading to a subsequent fall below 3000. So, for now, the short-term bias is to the upside, until we reach the top of this small downtrend channel. Ideally, today's candle would rally all the way up to the top of the downtrend channel, near 4000. If it closed near that high, that would be perfect for the three white soldiers pattern. Then, we could see a slight pull back, followed by a possible breakout above the channel (shown in arrows.) If/when we see a rejection at the top of the downtrend channel, we should pay very close attention, because the market could continue lower, returning to the bottom of the channel. However, I think the temporary shift in market sentiment is clear.
Remember, I gave you the morning star doji pattern, at the exact bottom of this move. Now, it's turning into three white soldiers. Another quintessential candlestick pattern, that could be a tell-tale sign that a breakout above the downtrend channel may be imminent. Furthermore, we have seen two successive bullish divergences on the MACD. The current divergence is just now starting to expand to the upside. So, in my opinion, the short term indicators show that the market could be gearing up for a more significant move to the upside.
Happy Holidays Everyone!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
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As a side note, it's very hard to project a channel breakdown before it happens. Which is why channels should be respected until they are broken. However, we have building evidence to suggest that this channel could likely break in the coming days. Also, it isn't a very long channel, which means it isn't extremely important to the market.
What about your analysis that Bitcoin is going to 1k 99.99%?How mutch cash you got from the whales to spread such a lies so people sell just before the reverse ,huh?Basxxxd!!!
@gunbotxt123, You clearly don't understand that there is a major difference, between a medium-term analysis, and a short-term analysis. Short-term, I called the exact bottom with the morning star analysis, and I've followed it up perfectly with the three white soldiers chart, calling a downtrend channel breakout before it even happened. I also called the entire fall from 6000 perfectly, with a series of bear flags that I posted about. You see a small pop in the market, and think the bear market is finished, and that's why you're a noob. As I've said many times, this market could rally all the way to 6000, and still fall well below 3000, possibly even to 1000. Also, I've stated on numerous occasions, that BTC at 1100 is conditional. The condition is a breakdown below 3000. You can call me a liar all you want, but I'm one of the only people who spread truth in this market, which is filled with people (like you) who have unrealistic expectations. I called for 3000 when prices were around 10000, and everyone called me a liar and whatever like you are now. But friend, like almost everyone else, you will most likely eat your words in the future, and you will disappear into the shadows of the internet, like a coward — unwilling to apologize for your wrongful accusations.
@crayola11, Yeah you said if below 3k then there's no support so it would drop to 1k. You didn't say 99.9% chance 1k that's what the other guy was saying. I just wanted to follow up on the 1K and I think that explains it well
MagicPoopCannon
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@crayola11, Thank you Caryola. Sometimes the fine details can be overlooked, but they do play a major role in the evolution of the analyses. Good luck trading out there!
rkothwala
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@MagicPoopCannon, Yes, I still remember your call of 3K bitcoin few months back. There were many who laugh at that time. See what happened :)
a427Shelby
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@MagicPoopCannon, if it goes to 1000 it has to go beyond 3000. Another multiple scenario guy proclaiming “I called it”