Bitcoin about to form a reversal pattern or is 8k next?
As a follow on to my last analysis I spoke about the RSI and that it could keep rising or drop sharply, which it did the latter of the 2. I am expecting the daily RSI to hit the 30 mark shown by the dotted orange line. This would be around the $8000 to $8300 region.
BTC is currently trading above the 0.5 fib level @ $8485.24 on the larger fib retracement indicator. Bitcoin needs to sustain this level to not drop down to 8k which is where the 0.382 fib level is on the larger fib retracement indicator. Bitcoin would also need to break below the daily MA 100 (in orange) on it's way down to 8k. The MA 100 is around the $8250 to $8300 region.
The green up arrow indicates where the current candle could form a strong reversal pattern if it closes above $8800. If BTC can do this then the bearish scenario would be less likely to happen. Usually BTC returns to test the EMA 10 and/or the MA 21 at some stage after a sharp drop. If BTC does this from the reversal candle that may occur BTC could get up to $8970.28 before hitting some resistance at the 0.618 fib level and the EMA 10. If BTC breaks these it should get to the smaller fib retracement indicator level of 0.5 @ $9215
On the smaller timeframe hourly chart below we can see BTC is moving into the Gaussian Channel after trading below it for the drop down to current prices. BTC is also testing the MA 100 (in orange). If BTC can break these it could be the signal to bigger things on the longer timeframes.
On this 4 hourly chart we can see BTC trying to break the MA 21 (in orange) and has already broke above the EMA 10 (in blue). Bitcoin also broke the green downtrend line. RSI is showing some bullish divergence. If the candle where the green down arrow can close above the MA 21 it could signal a trend reversal is on the cards.
We can see on this daily chart below that BTC is currently near the bottom of the Gaussian Channel but has not touched it as yet. BTC could still drop down to touch the bottom of this channel which would then also make the RSI drop down to that 30 level also as well as hitting the MA 100 all around the $8300 region.
So, in summary, I am going long again right now with another buy @ $8300 incase BTC drops. I can't see BTC going below 8k but nothing is impossible in Bitcoin.
Happy trading legends!
HTBB
BTC is currently trading above the 0.5 fib level @ $8485.24 on the larger fib retracement indicator. Bitcoin needs to sustain this level to not drop down to 8k which is where the 0.382 fib level is on the larger fib retracement indicator. Bitcoin would also need to break below the daily MA 100 (in orange) on it's way down to 8k. The MA 100 is around the $8250 to $8300 region.
The green up arrow indicates where the current candle could form a strong reversal pattern if it closes above $8800. If BTC can do this then the bearish scenario would be less likely to happen. Usually BTC returns to test the EMA 10 and/or the MA 21 at some stage after a sharp drop. If BTC does this from the reversal candle that may occur BTC could get up to $8970.28 before hitting some resistance at the 0.618 fib level and the EMA 10. If BTC breaks these it should get to the smaller fib retracement indicator level of 0.5 @ $9215
On the smaller timeframe hourly chart below we can see BTC is moving into the Gaussian Channel after trading below it for the drop down to current prices. BTC is also testing the MA 100 (in orange). If BTC can break these it could be the signal to bigger things on the longer timeframes.
On this 4 hourly chart we can see BTC trying to break the MA 21 (in orange) and has already broke above the EMA 10 (in blue). Bitcoin also broke the green downtrend line. RSI is showing some bullish divergence. If the candle where the green down arrow can close above the MA 21 it could signal a trend reversal is on the cards.
We can see on this daily chart below that BTC is currently near the bottom of the Gaussian Channel but has not touched it as yet. BTC could still drop down to touch the bottom of this channel which would then also make the RSI drop down to that 30 level also as well as hitting the MA 100 all around the $8300 region.
So, in summary, I am going long again right now with another buy @ $8300 incase BTC drops. I can't see BTC going below 8k but nothing is impossible in Bitcoin.
Happy trading legends!
HTBB
Trade closed: stop reached:
Never like to predict too much, prefer to react, which is what was required when the scenario above played out fairly close to what I said.
BTC got up to $9215, retraced to $8970 but BTC kept going south which invalidated the bullish scenario and put 8k in play. Bears surprised everyone with a strong rejection at the 0.5 level instead of the usual 0.618 level.
I usually take profits at every fib level where I expect a retrace and I then short at same time so I nailed it when BTC hit $9215 then retraced like I expected. I just thought it would bounce off $8970 though and it smashed through this area with ease. Also I didn't think it would go below 8k and it did that also.
I am no longer in a margin trade and will be examining my charts to see where a safe entry point will be. Will it be long or will it be short?
Looking quickly I can see daily RSI has not hit the 30 level I spoke about, yet here is BTC trading under 8k already. Maybe a further drop to come so RSI hits it mark.
BTC got up to $9215, retraced to $8970 but BTC kept going south which invalidated the bullish scenario and put 8k in play. Bears surprised everyone with a strong rejection at the 0.5 level instead of the usual 0.618 level.
I usually take profits at every fib level where I expect a retrace and I then short at same time so I nailed it when BTC hit $9215 then retraced like I expected. I just thought it would bounce off $8970 though and it smashed through this area with ease. Also I didn't think it would go below 8k and it did that also.
I am no longer in a margin trade and will be examining my charts to see where a safe entry point will be. Will it be long or will it be short?
Looking quickly I can see daily RSI has not hit the 30 level I spoke about, yet here is BTC trading under 8k already. Maybe a further drop to come so RSI hits it mark.
Related Ideas
This is what I thought BTC may do last night.
BTC will hit the top of Gaussian Channel on 4 hour chart which is where MA 100 (in orange) sits also along with the 0.5 fib level, all around $9215.
BTC follow the green line on chart going up to these levels, then follow the red line to retrace back to $8970 (which would be where green line is on RSI also) then move up next green line on chart to 0.618 fib level @ $9407.
Maybe even get to $9500 but along this last green line path is a fair bit of resistance. 0.618 level being the main concern for me. Other red line is if BTC rejects strongly at the 0.618 fib level.
Be aware timeframe of this happening may not be what my lines are showing, if I was that perfect I wouldn't still be working for a living. Usually on a weekend prices rise when working traders take days off so this could be one of those weekends of green prices.
This could all be invalidated if BTC closes twice under the support level of $8970.
Good luck legends!
HTBB