Hi friends! Welcome to this update analysis on Bitcoin! Let's get right to it! Looking at the daily BTC chart, we can see that the pattern from yesterdays analysis didn't form a textbook morning star. As you can see, yesterday's candle was an inverted hammer with a small body. If the candle had a larger body, it would have been a textbook morning star formation, but regardless, we are seeing a continuation higher today. So, this is an important lesson that indicators don't have to be perfect. During my time publishing analyses, I have seen a lot off people express opposition to some of my charts, that show patterns that aren't technically perfect. I remember calling a head and shoulders at the top of ADA, and a lot of people disagreed, because they think that formations and patterns have to be perfect. That simply isn't true, and the more you delve into technical analysis, the more you will understand that. However, there is a fine balance. If a pattern is too abnormally skewed, it probably isn't what you think it is. So, you have to allow some wiggle room for formations, because they wont always be perfect.
Looking at today's chart, we can see that there is a nice big green continuation candle, right on the back of the morning star, or "quasi morning star." So, the morning star is working perfectly thus far. Additionally, we can see that BTC is above the 10 EMA (in blue) which I have been talking a lot about. BTC hasn't closed a daily candle above the 10 EMA since November 13th. So, if we close today above it, on the back of a morning star, that would definitely be a change in recent market behavior.
BTC is in a small downtrend channel right now (in black.) So, once price gets up to the top of the downtrend channel, it will run into resistance there. If BTC breaks out above the downtrend channel, I believe that we will see a rally to the 50 EMA (in orange) which would put BTC somewhere in the low 4000s.
Momentum on the MACD is expanding higher, after it held the uptrend of a bullish divergence (green trendline) which is the second bullish divergence in a series of bullish divergences that has been building on the BTC daily chart for months. These bullish divergences in series show that the sell-side momentum of the bear market has been consistently declining in the background, which suggests that we may be approaching an important bottom in the bear market. However, the bulls still have a lot of ground to make up. For now, price remains in a downtrend channel. Be on the lookout for a close above the 10 EMA (in blue) on today's daily candle. From there, we will be watching to see if BTC can breakout above the downtrend channel, of if it will force BTC back to the downside.
Happy Holidays Everyone, and good luck trading!
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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Update: BTC has now run into the top of the downtrend channel. A break above it would be very bullish for short-term price movement, and it would put a test of the 50 EMA in play.
The last comment on this -- @MagicPoopCannon , if you believe with 99.99% certainty that Bitcoin is going much lower (as you've stated), why wouldn't you caveat this? I suspect many are thinking this is the bottom and are going to jump in here for the long-term and get burnt bad. If you think ultimately it's headed lower, wouldn't the operative be to start building a larger short position? I see a lot of analysis here that says Bitcoin can go here or there on a 5min/30min chart etc., but most of this lack the bigger picture trend....
Regardless, I enjoy your analysis. I just wish more people spoke about things that could help retail investors.
I'm here saying that this is another dead-cat-bounce that will fade just like the rest of them. The moment to buy is when we get resolution on the regulation front. Without it, Bitcoin will go lower -- it's a gamble that is paying off horribly for most people. Just my take.
I continue to arm my followers with the keys to understanding this space and when the moment to buy will come.
Cheers and GL!
Ecua_Trader
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@Akhokhar86, Im not the master but I have some ideas. This is my long term trade although I’m in a long for a swing now. Targets to sell are above 6400 in my current trade but we will see what happens
venturetrade
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Cryptos are the textbook definition of pumps and dumps.
@satoshinakamoto2020, as I stated before, that is a target that's conditional on a breakdown below 3,000. Regardless, this rally is likely to be short lived, and it will probably not change the fact that we are in a bear market, which should extend through most of 2019.
@MagicPoopCannon, Me think short term it will run up to $5000 ish in expectation of BAKKT lunch in Jan 20th and ETF approval in Febr.
Then it will slowly grind down to your $1000 ish level for the rest of 2019.