Taiwan_Bear

Still bouncing b/w weekly 200MA & 200EMA (Speculative setups)

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
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Happy New Year guys!! My apology for the late greetings as I have been sick (headache + coughing) since Boxing Day. Originally thought that I would recover without taking any kind of medicine but the sickness just wouldn’t stop. Ultimately I still went to see a doctor on the 2nd Jan and have been taking antibiotics and using nasal spray since. Definitely not a good way to end 2018 and to start 2019. Now I am feeling a bit better so I can start giving you an update on Bitcoin .

Two weeks ago I mentioned about weekly 200EMA being a significant resistance and weekly 200MA being a crucial support. Bitcoin has been trading between these ranges since and was not able to surpass weekly 200EMA in a number of occasions. In addition, if you see on the chart, daily 50EMA is now touching the weekly 200EMA acting as another layer of resistance. On top of that, Bitcoin is currently printing lower high on the chart.

At this point in time, the bullish momentum seems to be fading away. The bulls need further confirmation to reignite the fuel to break through the weekly 200EMA resistance (and neckline of inverse h&s ). This is the reason I came up with the below 2x speculative bullish scenarios:
Bullish scenario 1: The bulls are waiting to buy at a lower price/more significant support. There is a possible bullish Gartley harmonics formation in which the D point coincides with the price structure where the bullish move from recent swing low ($3150) to recent swing high ($4220) started. This is also where the weekly 200MA is going to converge into. Hence why I anticipate the possible symmetrical triangle. If this plays out, there is a much higher probability that Bitcoin could complete the right shoulder.
Bullish scenario 2: Ascending triangle forming with the top of ascending triangle overlaps with the weekly 200EMA resistance. This means that the buyers are willing to buy at a higher price (thus creating higher low) towards the resistance leading to a possible breakout.

Even if Bitcoin breaks above the inverse h&s it does not mean Bitcoin has now gone from a bear market to a bull market. What we really want to see is a retest of weekly 200MA and confirm it another time as support (ie. Double bottom ), or some kind of sideways/consolidations between $3150 - $4300 to consider it a possible bear market bottom. If any candle closes below the recent swing low, then the possible bullish scenarios are invalidated.

If you have gained knowledge/insights from this post, please don’t forget to press that LIKE button. It's the only subscription fee I charge :).

Thanks for all your support in 2018. Let’s continue our trading journey together. Don’t hesitate to leave any question in the comments section below. I am more than happy to assist.

I have set up some goals for 2019:
1. Lose another 8kgs on top of 24kgs that I have lost in 2018, through exercise and eating healthy
2. Spend 3 hours+ per day on educating myself on trading and backtesting
3. Increase my winning percentage by 5% or more
4. To reach 5000 followers on TradingView

What are your goals for 2019?

Taiwan Bear

***Please note this post is for educational purposes only. Not a recommendation to buy/sell***
Comment: As mentioned in my post, both daily 50EMA & weekly 200EMA are acting as double resistance.

Don't buy now hoping it will break to the upside as you are simply guessing. Always wait for a retracement to buy low or wait for confirmation of a breakout.

Comment: BTC needs to stay and find support above the bottom of ascending triangle for my bullish scenario 2 to play out. Scenario 1 is still possible.
Comment: Bitcoin is heading towards the possible bottom of symmetrical triangle in which I anticipated 11 days ago. My view stays the same - bulls need more confirmation than just the head and shoulders.

95% of traders were telling people to buy in anticipation of a breakout while we stay disciplined. Bitcoin has dropped 12% since I gave out the warning on the 9th Jan.

Right now I see a possible downtrend channel.

Bullish case - go up now and find resistance between 0.5-0.618 retrace (also ab=cd) before another leg down
Bearish case - going down towards $3435 - 3200 and possibly find support there (remember weekly 200MA & Gartley are both at the same price level acting as support)

The best time to buy is when Bitcoin shows some reversal signal at the $3435 - 3200 range, such as double bottom on a smaller time frame, slowing down of bearish momentum, 4hr or daily engulfing candle ....etc (depending on your strategy)

Comment: As mentioned 4 days ago, BTC could go up and complete AB=CD and find resistance around 0.5-0.618 retrace.

Basically BTC is still ranging and within the possible triangle that I mentioned since a couple of weeks ago. However, there is a possibility that the bottom of the triangle has been shifted up. If that's the case then it means BTC could go up and retest the top of the triangle + the more significant structure around $4000.

If you compare BTC with ETH & LTC, both ETH & LTC are showing weakness.

The best thing to do now is to be patient and wait for market to show confirmation.

Comment: Power of AB=CD + fib retrace + structure
Comment: As expected, Bitcoin has hit 0.786. If you are shorting, it's not a bad idea to take some profits.

Conversely, if you are waiting to long, it's now time to spot for possible trend reversal.

Comment: There was no follow through by the bulls as yet after hitting 0.786. Now Bitcoin is once again in sideways action.

If Bitcoin breaks above the consolidation range with volume, I will enter a scalp on pullback and see if I can turn a scalp into a swing trade. This way you are risking small capitals in exchange for huge returns.

Conversely, if Bitcoin breaks down the range, I will wait for possible buy around $3180 - $3340 (which is the initial bullish setup that I posted on the 5th Jan)

Comment:
Comment: ETH has closed above 4hr 50EMA but have not yet close above 31 Jan high as well as the black dotted line @ $112.65.

Comments

Well neither of your calls actually happened. Your first scenario was double bottom of X and D wave which would make a very strong bullish move. Second is a reverse H&S that did not happen either. Interestingly this market supposed to breakdown at around 4200 but someone pushed it higher to make people believe this is indeed a strong bullish wave. It’s not. Just check the weekly/monthly volume, non of the sellers at 6500 level actually joined into this manipulated bull rally. Where are they? They’re the ones who take the amateurs money and just waiting another oppurtunity to create a short move to take them all again. You’ll understand what I mean when you see the monstrous selling volume in the coming days. Good job on your gains tho.
+1 Reply
@serhan, First scenario did not happen? Read again my friend. This is what I said "There is a possible bullish Gartley harmonics formation in which the D point coincides with the price structure where the bullish move from recent swing low ($3150) to recent swing high ($4220) started. This is also where the weekly 200MA is going to converge into".

Clearly, Bitcoin hit the D point of the Gartley pattern almost to the spot, As well, it hits right on the weekly 200MA.

It's not a double bottom X and D wave. It's called Gartley pattern.
Reply
@serhan, Many people are talking about volume, but by the time you see volume starts to increase it's already too late. The risk/reward ratio has dropped dramatically by the time there is a big volume.
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Good day bear
Good call on the bullish senario no#1
My I ask does this qualify as wavw 2 ending and will start wave 3
+1 Reply


Yes.
Range trading between 1400 days EMA and 1400 days200MA.

In addition, 9 days moving average line cross over 25 days moving average for 21 days. Go flat.
Standing above 25 days moving average for 19 days, and this line is going up slightly for 8 days.

Overall, it is quasi-bullish. I guess after washing out some floating lockup position, then price could be going up.
+1 Reply
Wow, great analysis again,wish you the best for 2019!

My main goal for 2019 is actually renting out my first property and add 3kg of muscle weight. That's it really XD

By the way what's your take on the S&P500 and global markets in general
I hear a lot of Fud there but its mainly due to fundamental issues that's been around for decades (too much debt, etc). Plus about issues that cause uncertainty buthave been shown to be just a little 'glitch' in the past (Europe problems, Global Slowdown, Fed Hikes, GeoPolitics)

Feels like all the Stock market problems would get solved if the Fed turns Dovish. You agree?

Would you make a TA analysis on S&P? That'd be really interesting
+1 Reply
@NQ95, Having a goal is better than having no goal at all. Wish you fulfill our goal in 2019.

Reply
NQ95 Taiwan_Bear
@Taiwan_Bear, haha true! Thanks Alot!!
+1 Reply
@NQ95,
From a weekly perspective, S&P500 has hit significant support at weekly 200MA. Not only that, S&P has hit long term trend line since 2009. However, you don't want to catch the knife, let the pattern to emerge to prove to you that the bottom is in. Use 2009 as an example, there was a V shape + inverse h&s. You could buy 30% at 960. And buy more later on when it breaks above weekly 200MA. This is one way that you could trade.



Then if you zoom in to daily chart, you can see the recent selling climax and what often ensues after a selling climax is a huge reversal (relief) and this is what's happening right now. So what you want to focus now is to find the resistance to sell (whether you are buying (lock in profits) or shorting). And how to find the resistance? First resistance is at 0.5 retracement. Second resistance is determined by possible AB=CD, which confluence with the neckline and 0.618 - 0.786 retracement.



The current crash is different to 2008 as there is no significant affair that's impacting on the economy. It looks to me that the recent volatility is caused by irrational decisions. SPX has dropped 21% from the all-time-high. By looking at historical data, a 21% drop without any significant fundamental issues is substantial. As a result, I would be more interested in buying then selling. But again, I need to wait till a pattern to emerge to prove to me the bottom is in.
+3 Reply
NQ95 Taiwan_Bear
@Taiwan_Bear, This makes a lot of sense
I was fearing this. I shorted the SnP big time but I quickly realiseed the only reason it went down so much is because all these fears of doom and gloom were getting priced in already.

Plus a strong retracement is expected after such a deep fall without a real reason like you said

Thanks a lot TB! I'll be following these levels more closely
+1 Reply
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