Since my last Bitcoin analysis, we broke out of the flag to the upside. However, volume has dropped off quickly since the initial move. This has me a bit concerned about forecasting a continuation just yet. Additionally, we're experiencing a bearish divergence on the daily RSI (price makes a higher high, while the RSI makes a lower high). This happened actually when Bitcoin first made an attempt to break the 5K range (got stopped at 5.9K). That area is circled in green. Bitcoin has proven to us that it can continue moving up, in the face of bearish indicators.
One statistic that really stands out to me, is that if you take Bitcoin's price from when it was in the low $8,000's, there have only been 150 days or so (estimated) when BTC price was ever higher than that point. If you take the 10 years of Bitcoin's existence, that means more than 3500 days were "good" days to buy Bitcoin, from a long term investing standpoint. I'm not talking about trading the daily swings. But this is also why trying to time the market is an unsuccessful endeavor for most people.
In any case, the market is at a really important moment. I mean, it's always an important moment for the market, but what's happening is particularly interesting. It's clear that Bitcoin had been outpacing altcoins for a while, but now alts have finally broken substantially away from their long term uptrend line and have actually followed Bitcoin on this recent move up. On the bottom chart, I've drawn an uptrend channel in light blue. You can see that over the last couple of days, that channel resistance has held us in check. It's no coincidence that Ethereum has also been stopped by the channel resistance.
Right now, it's difficult for me to say which direction the market will go. If that channel resistance breaks (if we use ETH as a leading indicator, I'd say above $284ish at present), some of the established alts may go on pretty substantial runs...since there isn't much overhead resistance for a while. This is honestly the biggest hurdle for altcoins to overcome. If they cannot surpass this resistance, they can fall at least 20% to the bottom of the channel. I want to be leaning towards a major breakout for altcoins, but it would be silly (and irresponsible) for me to present that as the only option. Bitcoin's steep uptrend is still in tact, but a breakdown of that could send it to test the bullish channel as support. If THAT breaks, we could have a failure to sustain the bullish breakout, and we will have to test some lower levels. Lots of people are waiting to buy though, so we'd need a major shift in sentiment for a breakdown like that to occur. So far, Bitcoin is following the scenario I posted not too long ago, where I forecasted a potential move towards the top of the channel at 11.4K, but things can change quickly.
For the sake of this analysis, here I will list the bullish and bearish indicators for the market.
Bullish Indicators:
1) Bitcoin has returned to its long term bullish channel and has held the bottom as support, since breaking back into it. The top of this channel is 11.4K, and it has not been tested yet. If you zoom out on my Bitcoin chart, you can see where that channel originates from.
2) Investor sentiment is very positive. People are starting to talk about crypto again. Media coverage is also positive.
3) Altcoins are coiling RIGHT below major long term resistance levels. Breaking the neckline around 115B would, in theory, indicate that a major altcoin bull run will occur.
4) Even pro analysts are in disbelief.
5) Many cryptocurrencies (ETH in particular) are still following recovery patterns very similar to what happened after the dotcom bubble bottomed out.
Bearish Indicators:
1) Bearish divergence and potential rising wedge for Bitcoin, if it can't take out the recent high with volume.
2) Lack of conviction in the recent move, as expressed through weakening volume
3) Many altcoins still failing to break the same resistances since Bitcoin was $5.2K...though repeated pressure on these resistances can also be bullish, and overall the altcoin market is higher. However, many alts have also broken long term supports against Bitcoin and have continuously failed to get back above them.
4) NVT signal. People keep talking about this. Just because it's ALWAYS been a major sell signal, doesn't mean it will continue to be so. It would probably a good sign if the NVT leaves the red zone and price DOESN'T drop much.
Anyway, this isn't financial advice. Just a bit of an overall analysis for the market, based on what I've been observing recently.
-Victor Cobra
One statistic that really stands out to me, is that if you take Bitcoin's price from when it was in the low $8,000's, there have only been 150 days or so (estimated) when BTC price was ever higher than that point. If you take the 10 years of Bitcoin's existence, that means more than 3500 days were "good" days to buy Bitcoin, from a long term investing standpoint. I'm not talking about trading the daily swings. But this is also why trying to time the market is an unsuccessful endeavor for most people.
In any case, the market is at a really important moment. I mean, it's always an important moment for the market, but what's happening is particularly interesting. It's clear that Bitcoin had been outpacing altcoins for a while, but now alts have finally broken substantially away from their long term uptrend line and have actually followed Bitcoin on this recent move up. On the bottom chart, I've drawn an uptrend channel in light blue. You can see that over the last couple of days, that channel resistance has held us in check. It's no coincidence that Ethereum has also been stopped by the channel resistance.
Right now, it's difficult for me to say which direction the market will go. If that channel resistance breaks (if we use ETH as a leading indicator, I'd say above $284ish at present), some of the established alts may go on pretty substantial runs...since there isn't much overhead resistance for a while. This is honestly the biggest hurdle for altcoins to overcome. If they cannot surpass this resistance, they can fall at least 20% to the bottom of the channel. I want to be leaning towards a major breakout for altcoins, but it would be silly (and irresponsible) for me to present that as the only option. Bitcoin's steep uptrend is still in tact, but a breakdown of that could send it to test the bullish channel as support. If THAT breaks, we could have a failure to sustain the bullish breakout, and we will have to test some lower levels. Lots of people are waiting to buy though, so we'd need a major shift in sentiment for a breakdown like that to occur. So far, Bitcoin is following the scenario I posted not too long ago, where I forecasted a potential move towards the top of the channel at 11.4K, but things can change quickly.
For the sake of this analysis, here I will list the bullish and bearish indicators for the market.
Bullish Indicators:
1) Bitcoin has returned to its long term bullish channel and has held the bottom as support, since breaking back into it. The top of this channel is 11.4K, and it has not been tested yet. If you zoom out on my Bitcoin chart, you can see where that channel originates from.
2) Investor sentiment is very positive. People are starting to talk about crypto again. Media coverage is also positive.
3) Altcoins are coiling RIGHT below major long term resistance levels. Breaking the neckline around 115B would, in theory, indicate that a major altcoin bull run will occur.
4) Even pro analysts are in disbelief.
5) Many cryptocurrencies (ETH in particular) are still following recovery patterns very similar to what happened after the dotcom bubble bottomed out.
Bearish Indicators:
1) Bearish divergence and potential rising wedge for Bitcoin, if it can't take out the recent high with volume.
2) Lack of conviction in the recent move, as expressed through weakening volume
3) Many altcoins still failing to break the same resistances since Bitcoin was $5.2K...though repeated pressure on these resistances can also be bullish, and overall the altcoin market is higher. However, many alts have also broken long term supports against Bitcoin and have continuously failed to get back above them.
4) NVT signal. People keep talking about this. Just because it's ALWAYS been a major sell signal, doesn't mean it will continue to be so. It would probably a good sign if the NVT leaves the red zone and price DOESN'T drop much.
Anyway, this isn't financial advice. Just a bit of an overall analysis for the market, based on what I've been observing recently.
-Victor Cobra
Comment:
Hold onto your hats! If we can break out here, we might see some explosive growth.
Comment:
Traders really getting slammed here. We had a false breakout above the channel. This may be a bearish signal, indicating that we could head all the way down to the channel support. If that doesn't happen, we should instead hold near current levels in order to build more buying pressure.
Comment:
The neckline is still holding though! We'll see what happens over the next several hours until the daily close.
Comment:
Still in the ascending triangle
Comment:
We wicked TWICE over the last two days on the line that I already had in place, by the way :)
Comment:
The only issue is - I'd like to see volume drop off a bit more once we head towards a potential breakout point. So far, volume is still very high.
Comment:
The current daily candle needs to close above that neckline and present a strong rejection on the ascending triangle support to continue looking extremely bullish. A close below may indicate that we need to drop to the bottom of the channel.
