Bitcoin longer term outlook : pretty bearish. Short? Not yet.
Today I had a look at the longer term outlook for bitcoin .
Monthly:
Currently, the candle just opened, so it is a bit early to draw conclusion from this, but it starts to look ultimately bearish .
Prices went higher, but Elder Force Index and MACD Histogram are diverging. There is also a little ATR channel divergence.
Previous top shows wicks topped out in the +3 ATR channel and candle closing prices in the +2 ATR channel.
The current top tops out slightly above the +1 ATR channel.
The previous candle shows a tail and after the current candle open, it wicked halfway the tail of the previous candle and went down since.
There is a but thought. We’re only 6 days into the monthly candle, that’s like 20%.
Let’s look at the 2 weekly TF.
Weekly:
We’re ending the weekly now and this does not look very well either. There is again a tail on the top (see black arrow), prices are diverging with MACD-H and EFI as well.
We’re coming from a Stochasting RSI ovebought condition and going down. The fast EMA turns negative, giving a red impulse.
A red impulse means the MACD Histogram and the fast EMA are both declining.
This does not look good, for bulls. There is some support on 10K though, that could hold.
But this does not seem likely, looking at the longer term, which is showing a bearish divergence as well.
But as stated, that candle just began.
So, unless we see a very strong resistance and a strong continuation of the uptrend that started from march, we will probably see much lower prices in the months to come.
Then, what I expect:
For the uptrend to continue, the weekly chart could show a pullback, to the EMA or the -1 ATR line, and then pick up.
There is not so much historical data on BTC if you look at it on the weekly TF, but pullbacks tend to go to -1 ATR, and there was this extreme situation in march, where the weekly candles closed in the -2 ATR zone.
There was like never a bearish divergence on the weekly since the decline after the ATH , so there is not much to go on here. I expect to see it pullback somewhere between -0.5 ATR and -1.5 ATR, that is the box drawn on the weekly.
If he monthly as a result also will show a bearish divergence, we could see a decline up to 6K, which is the -1 ATR line. But that is way to early to say.
For now I expect this decline, ending somewhere between the support levels of 9,2K and 8,2K.
Is this a trade for me? Hell no.
The reason is simple, I’m too late. It was becoming clear halfway in the week, and then I could have shorted around 11,5K-ish. I was in neglect too long, too bullish , missing what the market was presenting.
And now we have this huge candle, that would place my entry around 10250.
The stoploss would be a bit above 12K resistance level .
The target would be 9200 up to 7800.
For the first target, the R:R is 1:1, and the nearly -2 ATR channel would give us a nice R:R ratio of 1:2.5.
That target is interesting, but the plan will be this:
As this candle was pretty strong and fast, I expect we will see a pullback on the shorter TF. As this decline also coincided with the Stock market, it is best to see how the whole global market, including crypto behaves on tuesday when the market opens.
That could show some new perspectives on the market.
I will also keep an eye on the monthly, as we see that candle develop over the coming weeks.
Monthly:
Currently, the candle just opened, so it is a bit early to draw conclusion from this, but it starts to look ultimately bearish .
Prices went higher, but Elder Force Index and MACD Histogram are diverging. There is also a little ATR channel divergence.
Previous top shows wicks topped out in the +3 ATR channel and candle closing prices in the +2 ATR channel.
The current top tops out slightly above the +1 ATR channel.
The previous candle shows a tail and after the current candle open, it wicked halfway the tail of the previous candle and went down since.
There is a but thought. We’re only 6 days into the monthly candle, that’s like 20%.
Let’s look at the 2 weekly TF.
Weekly:
We’re ending the weekly now and this does not look very well either. There is again a tail on the top (see black arrow), prices are diverging with MACD-H and EFI as well.
We’re coming from a Stochasting RSI ovebought condition and going down. The fast EMA turns negative, giving a red impulse.
A red impulse means the MACD Histogram and the fast EMA are both declining.
This does not look good, for bulls. There is some support on 10K though, that could hold.
But this does not seem likely, looking at the longer term, which is showing a bearish divergence as well.
But as stated, that candle just began.
So, unless we see a very strong resistance and a strong continuation of the uptrend that started from march, we will probably see much lower prices in the months to come.
Then, what I expect:
For the uptrend to continue, the weekly chart could show a pullback, to the EMA or the -1 ATR line, and then pick up.
There is not so much historical data on BTC if you look at it on the weekly TF, but pullbacks tend to go to -1 ATR, and there was this extreme situation in march, where the weekly candles closed in the -2 ATR zone.
There was like never a bearish divergence on the weekly since the decline after the ATH , so there is not much to go on here. I expect to see it pullback somewhere between -0.5 ATR and -1.5 ATR, that is the box drawn on the weekly.
If he monthly as a result also will show a bearish divergence, we could see a decline up to 6K, which is the -1 ATR line. But that is way to early to say.
For now I expect this decline, ending somewhere between the support levels of 9,2K and 8,2K.
Is this a trade for me? Hell no.
The reason is simple, I’m too late. It was becoming clear halfway in the week, and then I could have shorted around 11,5K-ish. I was in neglect too long, too bullish , missing what the market was presenting.
And now we have this huge candle, that would place my entry around 10250.
The stoploss would be a bit above 12K resistance level .
The target would be 9200 up to 7800.
For the first target, the R:R is 1:1, and the nearly -2 ATR channel would give us a nice R:R ratio of 1:2.5.
That target is interesting, but the plan will be this:
As this candle was pretty strong and fast, I expect we will see a pullback on the shorter TF. As this decline also coincided with the Stock market, it is best to see how the whole global market, including crypto behaves on tuesday when the market opens.
That could show some new perspectives on the market.
I will also keep an eye on the monthly, as we see that candle develop over the coming weeks.