Hi friends! Welcome to this update analysis on Bitcoin! Let's get right to it! Looking at the four hour chart, you can see that BTC has now gotten back above the top trendline of the descending parallel channel. If you recall from yesterday's analysis, I said "there's still a chance that BTC could rally back above the downtrend channel, to test the 50 EMA from the daily chart (in orange.) However, we're also printing what appears to be a bear flag [under the 3] inside of the downtrend channel." So, the bear flag failed to break down, and BTC has now rallied back above the top of the downtrend channel.
I saw a few comments from people who were rejecting this formation as a channel. I think it's because my previous analyses didn't connect the top trend line to the original touches. Regardless, I will explain why it is definitely a downtrend channel. As you can see on the top trendline, there are two clear touches, where resistance prevented price from moving any higher. On the bottom trendline, you can see that there are also two clear touches, that prevented price from moving any lower. The spread between the top touches and the bottom touches, creates a perfectly parallel channel. Furthermore, there is a clear midline of the channel, which is something I often look for when I am assessing channels. You can see that the dashed midline on this channel has several interactions, all of which are further confirming this as a two part channel.
Most recently, price has been reacting very clearly, with the top of the channel (3.) You can see that we broke above the channel, tried to hold it, and then broke back down. Then, BTC broke back above it, and is currently testing the top of the channel for support. So, price is clearly interacting with a parallel downtrend channel.
Assuming that we hold the top of the channel this time, we should continue higher, to FINALLY test the 50 EMA (in orange.) More specifically, that's the 50 EMA from the daily chart, which is what I'm interested in. This is the four hour chart, so I am using the 300 EMA here, to represent the 50 EMA from the daily. A test of that level would put BTC around $4325.
On the MACD, we can see that momentum is falling after a bearish crossover was formed on the 21st. For price to move higher, let's watch for support on top of the channel, followed by a rise in price and a bullish crossover on the 4 hour MACD. On the other hand, if price falls back into the channel, the bias will return to the downside until BTC can show that it can hold support above it.
Also, I have removed the inverted head and shoulders possibility, because it was a distraction from the primary technical focus, which is the downtrend channel.
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.***
My 3 year old son was in my office this evening and I had your page open on the screen and he says " Dada, look poop" as he was looking at your icon, that was a good laugh. Love your postings, Merry Christmas and Happy New Year!!
MagicPoopCannon
⋅
@DekDavis, haha awesome! Thanks for the kind words. Merry Christmas!
Ecua_Trader
⋅
Haha you should have moved the bear flag. Yesterday you said, tomorrow you will say, after tomorrow you will speak again but you miss often to see the big picture. Although I still am going long this was the first resistance in the daily and you called a rally. I’m perplexed by how easy you to from bear flag to bull run. Hahaha. Amazing!!
Je_Buurman
⋅
Still disagree, not because you didn't draw to both points but because the first point is from a previous (broken) channel. It didn't just drop under the channel than pops back up, it only looks that way because your channel is invalid (imo) that down-and-up (your point 3) is an uptrend from the (at the moment) bottom, note the volume increase.
Snuby3
⋅
@Je_Buurman, on my litecoin chart i have the current channel like this.. megaphone/wedge
I like @MagicPoopCannon TA. Usually clear and concise. You always put out great content even if I don't always agree it's good to see educated analysis!
Everyone - IMO capitulation already happened and BTC bottomed (miners going out of business, retail investors have all run away and now you are left with mostly long term speculators and investors). Could we retest near the lows? Obviously. But we won't break below 3.1k. Technically we can see accumulation taking place on every dip now. Global equity markets are getting destroyed and this will be a long term trend. Investors will flee to Gold, US Dollar and other precious metals and probably allocate a small % into BTC. Stagflation is now the talks of what could be hitting the US within a year. The fundamentals of BTC have never been better. Lightning network is expanding. We've launched freakin satellites in space to transmit the blockchain worldwide now so emerging markets are not reliant on the internet for payments! BTC is by far the most decentralized network when measured by every aspect (# of nodes, geographically and now technology with the satellites). We have Bakkt, fidelity and investors such as Goldman Sachs and other major institutions supporting Coinbase, Circle and the like.
You need to play the market psychology and understand what is happening right now. Everyone is saying we haven't hit bottom yet. Everyone is calling for an 1100 bitcoin. When you review what happened in Dec 2017 what was Mike Novogratz telling everyone? He said, who knows, BTC could go to 25k, 40k, or even 50k. FOMO to the max right? The same happens in capitulated markets no matter the asset class. You'll have smart analysts always calling for lower and lower prices. Why? Because it's the same psychology which happens when you have a bull market, but the opposite in price action. Short sellers get cocky and greedy. They start increasing leverage to 100x and they think BTC is going 50% lower. When you start seeing signs like this of stupid short sellers taking huge risks this is the time when you know we are nearing the bottom. It's no different than people taking out second mortgages to buy BTC at 19k. My advice is if you bought near the bottom HODL with a stop loss at break even. Of if you can't take it emotionally ONLY ONLY sell at major resistances to bring your avg. cost basis down. You want exposure to BTC before the short squeeze happens next month. Trust me. You won't be able to catch it and no one knows for sure on timing.
I'm going to focus on T.V. mostly with updated analysis as I'm going 100% into BTC analysis. I was more focused on other platforms analyzing forex and commodity markets. This title was more click bait admittedly, but I called the BTC bottom back on Sep 20th and more importantly within a few days.
@Khadija_AlShall, If you look at my weekly analysis publication on bitcoin you will see 4.4k is an interesting price area. This is where the 50 DMA and .382 Fibonacci extension level is located from the Dec 15th low. Many traders have identified an inverse H&S formation where the right shoulder is currently developing with a pattern target of around 5.1k. BTC so far is doing a great job defending the 20 EMA at $3,780. If we close the next two daily candles higher and go back over 4k again in the next 48 hours this would be very bullish sign. However if we fall below 3.5k this would be a very bearish development and a retest of 3k could happen. Many traders will take profits from $4.4 level to 5k level. So expect this price area to see lots of volatility and resistance.