BTC/USD 1H/4H charts (11/01/2018)

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Good morning, traders. The Internet is, once again, anything but stable this morning so there won't be a live stream but I will record a video and upload it as soon as the connection is stable enough to do so. Tech comes tomorrow so by Monday we should be good to go. During yesterday morning's live stream, we witnessed price doing what I suggested it would. The break to the downside stopped just about $5 from my target. After that we saw significant buying as price immediately shot up $150 right into my upper target range. This was a small shakeout which created the liquidity needed to break out of the local TR . I continue seeing the emotionally bearish "analysts" finding new reasons why price MUST go down and stay down, but my reasons for it not doing so have remained unchanged throughout this year.

The shakeout yesterday created a short TF double bottom by closing above the highest point between them. Based on the pattern, we should see price targeting the $6370 area. Doing so will bring price back up into the larger blue TR thereby confirming the drop four days ago was a spring on that TR ( LPS on the larger TF black TR ). In this case, we should expect price to continue up as it creates multiple LPS's in the blue TR , ultimately targeting the top of the larger TF black TR that's been in play for two months. This is also the R3 pivot on the 4H chart at $6587. There is the slight possibility that price will not continue to head upward toward the $6370 target since yesterday's high was pretty close to it at $6350 and pattern targets often don't play out exactly as drawn. The 4H OBV isn't convincing at this time, but that can change by the time the candle closes as the 15 minute OBV is showing us what I want to see -- upward movement.

Yesterday's pop sent 4H RSI to the resistance line, but not through it. This kept it from printing bearish divergence. If you were watching my live stream yesterday morning, then you know that price has held almost perfectly within the quick potential flag I drew right after price popped. My bias based on the volume and price action is up rather than down at this time, but a close below the $6250/$6255 level will suggest possible lower movement and I may change my opinion at that time. As long as price remains above yesterday's swing low at $6199.25, traders have little reason to be concerned. As mentioned yesterday, two gaps remain on the 15 minute chart at $6291 and $6229. In most cases, price returns to fill the gaps but these particular gaps appear to be breakaway gaps (decisive movement, associated with heavy volume , out of the local TR ) which means we don't usually expect them to fill as price is expected to continue moving in the direction of the breakaway.

With all this in mind, if price plays out as a flag, then the expected target based on the flagpole is around $6460. This would put it at the top of the blue TR/4H R1 pivot . Currently this is the expected movement, as explained above, while price targets the top of the larger TF black TR . The 4H RSI is printing a flag right under resistance at the moment increasing support for the idea that price will continue higher. However, as always, nothing is guaranteed in trading so traders should utilize strong risk management. Price dropping below the swing low from yesterday sets up an initial target of the bottom of that same black TR at around $6094/4H S5 pivot .

Overall, price remains within the larger two-month-old black TR between $6095 and $6587. Once price moves through the resistance or support of that TR , I will evaluate the movement to decide whether I will enter at that time. Until then, all this little movement is nothing more than noise with a risk that is far too great in exchange for any reward for me.

Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
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