Hi friends! Let's see what's happening on the four hour chart for Bitcoin! We can clearly see that BTC has put in a V bottom, and has rallied nicely off of yesterdays low. However, I want to caution everyone, that we do not have confirmation, that the selling is over. Interestingly, many of the other crypto charts that I follow, have already run into heavy overhead resistance, but BTC hasn't. In the case of BTC, it's heavy overhead resistance level is still higher, at about $12,900. That's the level that corresponds with the neckline of the head and shoulders pattern, the 50 % retrace, and now the 50 EMA (in orange) is in that area too. This is interesting, because, in comparison, Bitcoin appears to be running out of gas. Looking at the volume, we can see how much it has fallen, which is indicative of exhaustion in this rally from the low. On the MACD, however, momentum has had a bullish crossover and is expanding to the upside. With that said, if BTC can't even make it up to test the heavy resistance level, that would solidify the relative weakness, in comparison to the rest of the market. From here, I would watch to see if BTC can make it up to that level. It has broken above the 61.8% retrace, and that should be supportive (at first) if BTC begins to slide again. Despite the rally from the low, and how excited people are getting, the bears are technically still in control. Until BTC clears the heavy resistance, gets above the 50 EMA and the 200 EMA, and preferably above the rising black trendline, the damage has been done. We need to see those developments, as evidence that the bulls are regaining control. Otherwise, there is an old saying on Wall St. which you may become a victim of — Never try to catch a falling knife.
Dead Cat Bounce - is a temporary recovery from a prolonged decline or a bear market that is followed by the continuation of the downtrend. The name "dead cat bounce" is based on the notion that even a dead cat will bounce if it falls far enough and fast enough.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media! Good luck trading everyone. I'm out!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
I'm hoping you are correct. I've been waiting to get back into LTC in but didn't trust this rise, I'll admit to having some FOMO all morning but I don't want to get caught. Hope waiting doesn't bite me.
MagicPoopCannon
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@BigD1702, Patience is a virtue. It depends on your investment strategy, and risk tolerance, but for me, I like to sacrifice early gains, for high probability of success trades. That's why it's so important to see confirmation, and evidence that supports your trade. I hope this helps! Thank you for commenting BigD!
MagicPoopCannon: when you say you like to sacrafice early gains, for high probablilty of succes trades do you mean sit on the sidelines, and if it goes up don't worry about missing a few bucks, wait till it confirms the uptrend then jump back in, is this correct? And, where is a good place to buy back in for Litecoin? Thanks!
the_sunship
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totally agree. the bullishness for this weak rising wedge was just too bizarre
Stef_Gee
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i was just wondering the same thing on my chart
grimzeo
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Ty MPC
yuri609
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Thank you @MagicPoopCannon Agree with you. I predict 13k resistance bounce back to 10.5k and after we can see another rallye up to 15k resistance