mc_peewee

Bitcoin bears attack! A slight hope in a sea of red..

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Hello everyone!
So as expected, Bitcoin dropped soon after confirming hidden bearish divergence in the 4h and 6h charts.
All hope is not lost! There are a lot of hidden bullish signals that have presented themselves from this dump.

The .618 located at $3,550 held. No 4 or 6 hour candle so far was able to close decisively below it.
There is hidden bullish divergence that is now presenting itself in the 4h and 6h chart. We have a much higher low in price, with a lower low in the RSI . This suggests the bear momentum is beginning to falter.
Only a close below $3,120 can invalidate this hidden divergence.

We still have a huge form of support located around $3,360 - the .786 bull retracement from this huge bounce.
It just so happens that a 5th wave down from our local high will place us at exactly this support level .
Support holding at this level would be extremely bullish , as it is arguably the last line of defense for the bulls.

On the 5d time frame, a bullish cross is attempting to form on the MACD . That candle closes later today, but as it stands the candle is bearish engulfing which isn't normally a good sign. Only a close above $3,700 would nullify that.

There is also the chance that we are still forming a giant ABC correction from the overextended selling pressure from November. Currently the target for that sits at around $4,550.

Holding the .618 here would be very bullish , though I do not see that happening. The dump was I believe a wave 3, and right now we are experiencing a slight relief from a wave 4 retracement.
If I am correct, a 5th wave will place us exactly on the .786.

TLDR
Immediate support:
$3,550
$3,360
$3,150

Immediate resistance:
$3,680
$3,920
$4,100

I believe at this point we will most definitely test the . 786 retracement . What the market does at that point will decide our entire medium-term future. This particular area would have a very high RR for a long, so I would strongly suggest to look for a long entry around this area. I am still extremely bearish until a break of $4,100.

A 4h close below $3,120 will initiate a short with an initial target of $2,435.
Comment: The 1h chart gives me chills.
This is a long setup if I ever saw one.
Comment: For a few weeks now, I've been eyeing $3,450 as a potential long entry.
I was almost certain we weren't going to break back below that this soon.
If we get down that far, I expect $3,450 to be some serious support.
Keep that in mind.
Comment: The more and more I think about it...
Call me bias, call me what you want.


Something I'm wondering, what if we bullishly diverge the bullish divergence on the daily? That would mean price would get significantly lower, especially after this bounce...But the RSI would be higher.

Typically speaking, after a move such as the one from $6,300, we would normally AT MINIMUM re-test the bottom.
This has me thinking...What about the weekly? We just dipped our toes into oversold but have yet to test the strength of the bulls.

I think we're about to see a new low in the coming weeks.
Comment:
If we were to bullishly diverge on the weekly RSI...This would make sense.
Comment: My long-term buy-in point is $953. If we get that far.
However, if we bullishly diverge in the weekly RSI...
I will be a buyer. A big one.
Comment: Something I just noticed.
On the 2d time frame, which just closed a bearish engulfing candle, we are bullishly diverging.


This may not seem like a big deal, but currently in the 1w timeframe we are sitting on a higher low. The 5d MACD is showing a bullish cross on the next candle close if we hold this low.

This along with the massive divergence in the 12h leads me to believe there should be a very nice relief rally if we hold above $3,550.


This is so hard to call, but I'd have to say I'd definitely be long if this holds the .786.
Comment:
1D is showing a bearish crossover forming in the MACD.
Comment:

Currently, Bitcoin is struggling to get above the .236 retracement of this dump.
This could indicate what I said earlier, a wave 4 retracement from our local high, which would begin a final incoming wave 5.

If this is the case, I've marked where I believe Bitcoin will catch support next.
The box is extreme support. Should it break, I believe it to be highly likely that Bitcoin will re-test the current yearly low, and probably plunge right through it.
@mc_peewee - very detailed analysis. I know how much time goes into these. thumbs up! I might do a counter-trend trade if btc breaks above $3,560 with high volume and momentum. the thing is the IHS is still VALID pattern even though many analyst say it's over. we didn't close below the left shoulder so as a bull I can't rule that out completely. I don't give it high odds we break back up above the neckline but who knows...it's bitcoin. If we close below 3,560 that invalidates the IHS and I think we go down to retest the 200 WMA where I'm hoping for a double bounce. We do a daily candle close below 3k, I'm shorting.



Reply
bitcoinbobby bitcoinbobby
I mean to say I might do a counter trend trade above $3,680, not $3,560.
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