Bitcoin: Last weeks action, and coming weeks forecast
I’m briefly going to go through last weeks action, look at where we are now, and what I’m looking for next week. The short trade entered on November 9th is still active, and I was looking to exit that and enter long for a countertrend trade on Friday. This look good until yesterday, when price fell another 10%. For the moment that long setup is off the table, but I may be able to revisit it this week, depending on what happens. More about that later on..
I haven’t taken any profit off the short yet, still in from about 6250. There’s a link to that trade below, where you can follow me manage that position.
Now let’s go to the charts.
Weekly
The indicator prints an overextension signal on this weeks candle (1), that’s something to keep in mind when looking at the daily chart. The two support levels ((2) and (3)) are the obvious ones everyone knows about, around 3000 and eventually between 1300 and 1000.
The obvious thing to notice is that after breaking the support around 5000, there is no more support until the the 3000 area.
The longer term picture is that the market will move down to these levels, but maybe not straight away. The market is grossly overextended and people are shitting-in-their-pants scared, so we may be due for a correction of some sort now that all hope seems lost.
Do the lower timeframes tell the same story?
Daily
The short was entered at the blue line (1), and now the indictor signals overextension (2). The todays entire candle is below the 3-period ema, and there is a forming divergence on the CMF. The divergence is still forming, and in no way a “trade signal”, but it does indicate that selling pressure is not increasing as price drops further. The market may be due for a reset before continuing down to the 3000 area.
These conditions were also true on Friday, where the doji also printed an overextension signal. At that time we had a flat trend line ((3), the kijun), which made me look for a countertrend long trade. Now the conditions are slightly different, which is why that setup is off the table, and I’m not looking at a long setup at current prices. The trend line is no longer flat (4), but angled down. This may flatten out tomorrow and we may give another look to a countertrend setup, but we’ll deal with that when it happens.
The stop loss for the short is at the lowest red line. the higher red line was yesterdays stop.
4HR
The bullish divergence on both the CMF and UO becomes more apparent on the 4HR timeframe (1). Divergence can go on for some time, there can always be more divergence, so I don’t use it as a signal as such. Rather, it tells me that if price breaks to the upside through certain resistance level, it will do so with momentum driving it which gives me more confidence that the bullish trade will work out. The levels I’m looking at are the trend line (2), and eventually the flatness of the trend line and resistance cloud (4).
Weekly forecast
Long term the market will probably move down to 3000 and possibly 1300-1000, which would be a healthy thing for Bitcoin to do (the healthy option is often not preferred by most people…).
The short I’m in from 6250 is still active, and that position will close when the market hits the stop around 4000. If that happens I’ll start looking countertrend long again.
At the moment all signs point to an exhausted and overextend market which is due for a correction. The setup I cancelled yesterday still lingers in the back of my mind. The 4HR chart justifies that lingering… For a countertrend long to become a viable option again I need price to move above around 4200. I’ll then look for the indicator to give me a bullish trade setup on the 4HR timeframe, keeping the daily resistance levels in my mind. These are the same levels that I had for the previous bullish setup (linked below)
The other scenario is that price does not bounce at all, but indeed falls straight through to the first support level. As I’m still in short I won’t argue with that, but look for price reaction and the indicator signals at the 3000 area to exit the short position (and perhaps look for a bullish entry there). This is all in the future, and before we get there I’ll have more candles and information to base a decision on.
If you enjoy these setups and analysis please like and subscribe so more people can join you :)
If you want to tryout our indicator and strategy, follow us and drop a comment or pm and we’ll get you set up.
Stay calm, and happy trading!
Active trade
More information on our indicator can be found below:
I haven’t taken any profit off the short yet, still in from about 6250. There’s a link to that trade below, where you can follow me manage that position.
Now let’s go to the charts.
Weekly
The obvious thing to notice is that after breaking the support around 5000, there is no more support until the the 3000 area.
The longer term picture is that the market will move down to these levels, but maybe not straight away. The market is grossly overextended and people are shitting-in-their-pants scared, so we may be due for a correction of some sort now that all hope seems lost.
Do the lower timeframes tell the same story?
Daily
These conditions were also true on Friday, where the doji also printed an overextension signal. At that time we had a flat trend line ((3), the kijun), which made me look for a countertrend long trade. Now the conditions are slightly different, which is why that setup is off the table, and I’m not looking at a long setup at current prices. The trend line is no longer flat (4), but angled down. This may flatten out tomorrow and we may give another look to a countertrend setup, but we’ll deal with that when it happens.
The stop loss for the short is at the lowest red line. the higher red line was yesterdays stop.
4HR
Weekly forecast
Long term the market will probably move down to 3000 and possibly 1300-1000, which would be a healthy thing for Bitcoin to do (the healthy option is often not preferred by most people…).
The short I’m in from 6250 is still active, and that position will close when the market hits the stop around 4000. If that happens I’ll start looking countertrend long again.
At the moment all signs point to an exhausted and overextend market which is due for a correction. The setup I cancelled yesterday still lingers in the back of my mind. The 4HR chart justifies that lingering… For a countertrend long to become a viable option again I need price to move above around 4200. I’ll then look for the indicator to give me a bullish trade setup on the 4HR timeframe, keeping the daily resistance levels in my mind. These are the same levels that I had for the previous bullish setup (linked below)
The other scenario is that price does not bounce at all, but indeed falls straight through to the first support level. As I’m still in short I won’t argue with that, but look for price reaction and the indicator signals at the 3000 area to exit the short position (and perhaps look for a bullish entry there). This is all in the future, and before we get there I’ll have more candles and information to base a decision on.
If you enjoy these setups and analysis please like and subscribe so more people can join you :)
If you want to tryout our indicator and strategy, follow us and drop a comment or pm and we’ll get you set up.
Stay calm, and happy trading!
Active trade
More information on our indicator can be found below:
Comment:
Still working the IBR, so no new information to help me. The selling pressure seems to be decreasing as the CMF moves up. Let's see how todays candle closes to see if that can give me any more information. As long as we stay within the IBR there's nothing to trade here, just something to watch.
Comment:
A nice bounce, now looking for a trade setup:
Related Ideas
I’ll have to see what happens from here. If we get to the top of the range I’ll be looking for a long setup on the 4HR chart. If we move to the bottom of the range, the 4HR short setup is a trade I will take. I’ll only take a very small position here, as I don’t see the market falling far from here without getting “reset”. The first point of support is the LTS at around 3000.