BTC Below Critical Support After Possible Failed Recovery!
People have recently been accusing me of flipping from bullish to bearish too frequently. There's a reason for that. If you look at this daily chart of BTC, you can see that it has several mixed signals but the overall trend is bearish. Allow me to explain.
First, let's look at the formations. You can see that we have two conflicting formations in one. We have a clear head and shoulders pattern (in red) and we also have a falling wedge pattern (dashed black trendlines.) One is bearish and one is bullish. Personally, I have been favoring the head and shoulders pattern more than anything. That's because I see a lot more room to the downside on the weekly chart, which I have discussed recently.
Looking closer at the past couple of weeks of price action, you can see that BTC has been struggling with an EXTREMELY critical level. We have three critical features that are all converging. They are the 61.8% retrace of the rally from 3150 to 13800, the 50 week moving average (in orange,) and the neckline of the head and shoulders pattern. Those levels are massively important, and BTC has been flipping above and below them for the past two weeks. So, it hasn't been a clear hold or failure, hence my short-term uncertainty.
You can see that the Gaussian Channel is red and falling, and BTC is under it. So, that suggests that there is more downside in the cards for BTC.
Then we have the NVT. I love the NVT. Some people hate on it, but the fact is that to this day, it has been 100% accurate in signaling major tops and bottoms, particularly on the weekly chart. Here on the daily NVT, I've noticed something interesting. You can see that there were three recent occasions where the NVT was rising on the pink trendline supports. Then, the NVT sell signal flashed, and price collapsed. That happened near the all time high, it happened just before the fall from 6000, and it happened just after the 2019 high of 13800. Each time the NVT broke that rising support, BTC was severely punished. However, we now have an even larger rising support, the black trendline. Currently, the NVT is not too far above it. So, I will be watching to see if the black trendline is broken. If it is, we could see some spectacular selling in BTC.
Tying that in with some of my recent mid-term analyses, I could see how such a breakdown could send BTC to retest the 200 week MA, which is currently right around 5000. That is the single most important technical feature for Bitcoin to hold, simply because BTC has never broken it. Never in the entire history of this asset, has it closed below the 200 week moving average. So, if that happens, we could see a very different side of BTC — a side that would probably cause 90% of you to throw in your towels, declaring the death of Bitcoin.
In the short term (as long as BTC stays below the neckline of the head and shoulders pattern, the 61.8% retrace, and the 50 week moving average) I think the immediate target is the top of the downtrend channel (in blue) or the bottom of the falling wedge. Whichever comes first. As of right now, BTC is breaking down below all of those critical features, as the bears maintain overwhelming control.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
First, let's look at the formations. You can see that we have two conflicting formations in one. We have a clear head and shoulders pattern (in red) and we also have a falling wedge pattern (dashed black trendlines.) One is bearish and one is bullish. Personally, I have been favoring the head and shoulders pattern more than anything. That's because I see a lot more room to the downside on the weekly chart, which I have discussed recently.
Looking closer at the past couple of weeks of price action, you can see that BTC has been struggling with an EXTREMELY critical level. We have three critical features that are all converging. They are the 61.8% retrace of the rally from 3150 to 13800, the 50 week moving average (in orange,) and the neckline of the head and shoulders pattern. Those levels are massively important, and BTC has been flipping above and below them for the past two weeks. So, it hasn't been a clear hold or failure, hence my short-term uncertainty.
You can see that the Gaussian Channel is red and falling, and BTC is under it. So, that suggests that there is more downside in the cards for BTC.
Then we have the NVT. I love the NVT. Some people hate on it, but the fact is that to this day, it has been 100% accurate in signaling major tops and bottoms, particularly on the weekly chart. Here on the daily NVT, I've noticed something interesting. You can see that there were three recent occasions where the NVT was rising on the pink trendline supports. Then, the NVT sell signal flashed, and price collapsed. That happened near the all time high, it happened just before the fall from 6000, and it happened just after the 2019 high of 13800. Each time the NVT broke that rising support, BTC was severely punished. However, we now have an even larger rising support, the black trendline. Currently, the NVT is not too far above it. So, I will be watching to see if the black trendline is broken. If it is, we could see some spectacular selling in BTC.
Tying that in with some of my recent mid-term analyses, I could see how such a breakdown could send BTC to retest the 200 week MA, which is currently right around 5000. That is the single most important technical feature for Bitcoin to hold, simply because BTC has never broken it. Never in the entire history of this asset, has it closed below the 200 week moving average. So, if that happens, we could see a very different side of BTC — a side that would probably cause 90% of you to throw in your towels, declaring the death of Bitcoin.
In the short term (as long as BTC stays below the neckline of the head and shoulders pattern, the 61.8% retrace, and the 50 week moving average) I think the immediate target is the top of the downtrend channel (in blue) or the bottom of the falling wedge. Whichever comes first. As of right now, BTC is breaking down below all of those critical features, as the bears maintain overwhelming control.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-