Bitcoin biggest buy signal so far. Huge green candle in January!
First off. Don't take this an advice or as a "trade call".
People keep asking me how my trades have been on point so far, and keep sending me private messages asking for help in their trades. Another question that I get asked the most is if BTC has bottomed in. Let's tackle that here.
Has bitcoin bottomed in? Yes it has. This doesn't mean that the same bottom will not get retested. It is possible. Unlikely any time soon however.
As I mentioned in the title January is going to be the strongest month so far in over a year for bitcoin.
On the monthly chart, we can see that a possible morning star is forming. This pattern occurs after a big red candle (november), a very small red or green doji candle (december) and the a big green candle. Morning star is a reversal pattern, if formed on the monthly, it will officially mean that 2019 will be a bull year.
Let's keep analyzing the monthly chart. Below the chart, I have shown a particular leading (yes leading and not lagging) indicator. This indicator is called Mean Reversion. For those who don't know what mean reversion is, it is a relative "return to normal" price action. As you can see, so far the mean reversion on big timeframes like a monthly chart has produced really well timed signals. In december 2017, a sell signal crossover (when green line is under red line) occurred on the indicator when mean reversion broke near or above 1 (blue circle), in July a buy signal was produced before the rally began. Finally, another buy signal occurred this december when the indicator is near or less than 0. It's likely, therefore, that a move up to normal (0.5) is coming soon, given the bullish crossover (green over red) and that the relative indicator is near 0.
On the monthly chart, RSI is still in the bullish zone, Stoch RSI is very oversold, this is another clue that a move up (and a big one) is likely.
Finally, we can see that the 20-ma on the monthly chart has not been breached but almost reached, which means it is a very very strong support around ($2950). It was not reached because the 200-ma was reached on the weekly chart (around $3160). Now, let's analyze a pattern on the weekly chart.
As we can see, a potential inverse head and shoulder pattern is forming, this is another bullish reversal scenario on a big timeframe. The 200-ma held and provided a big bounce. RSI has bounced from oversold conditions. Stoch RSI is on a move up. On the daily chart, the inverse head and shoulder does not look perfect, but it will still be successful, let me give you another proof.
This is a very strong inverse Head and Shoulder pattern on the daily chart of the Total Marketcap including BTC. Same pattern is shown on the chart of the total marketcap excluding BTC.
Now, these are enough proofs to make me believe that 2019 is going to be the start of the bull run.
Take this analysis more as my opinion rather than a trade call please.
Like and follow if you liked this analysis!
People keep asking me how my trades have been on point so far, and keep sending me private messages asking for help in their trades. Another question that I get asked the most is if BTC has bottomed in. Let's tackle that here.
Has bitcoin bottomed in? Yes it has. This doesn't mean that the same bottom will not get retested. It is possible. Unlikely any time soon however.
As I mentioned in the title January is going to be the strongest month so far in over a year for bitcoin.
On the monthly chart, we can see that a possible morning star is forming. This pattern occurs after a big red candle (november), a very small red or green doji candle (december) and the a big green candle. Morning star is a reversal pattern, if formed on the monthly, it will officially mean that 2019 will be a bull year.
Let's keep analyzing the monthly chart. Below the chart, I have shown a particular leading (yes leading and not lagging) indicator. This indicator is called Mean Reversion. For those who don't know what mean reversion is, it is a relative "return to normal" price action. As you can see, so far the mean reversion on big timeframes like a monthly chart has produced really well timed signals. In december 2017, a sell signal crossover (when green line is under red line) occurred on the indicator when mean reversion broke near or above 1 (blue circle), in July a buy signal was produced before the rally began. Finally, another buy signal occurred this december when the indicator is near or less than 0. It's likely, therefore, that a move up to normal (0.5) is coming soon, given the bullish crossover (green over red) and that the relative indicator is near 0.
On the monthly chart, RSI is still in the bullish zone, Stoch RSI is very oversold, this is another clue that a move up (and a big one) is likely.
Finally, we can see that the 20-ma on the monthly chart has not been breached but almost reached, which means it is a very very strong support around ($2950). It was not reached because the 200-ma was reached on the weekly chart (around $3160). Now, let's analyze a pattern on the weekly chart.
As we can see, a potential inverse head and shoulder pattern is forming, this is another bullish reversal scenario on a big timeframe. The 200-ma held and provided a big bounce. RSI has bounced from oversold conditions. Stoch RSI is on a move up. On the daily chart, the inverse head and shoulder does not look perfect, but it will still be successful, let me give you another proof.
This is a very strong inverse Head and Shoulder pattern on the daily chart of the Total Marketcap including BTC. Same pattern is shown on the chart of the total marketcap excluding BTC.
Now, these are enough proofs to make me believe that 2019 is going to be the start of the bull run.
Take this analysis more as my opinion rather than a trade call please.
Like and follow if you liked this analysis!
Comment:
This idea is still in play. Took a step back yesterday to reflect. I noticed this interesting fact. In bitcoin's history, BTC never closed more than 5 consecutive months in red. The last time BTC saw 5 months closing in red consecutively, price was $20 and corrected to $1.70 (from July 2011 - Nov 2011). I am still thinking that we will reach > 5k and then drop but still close the month in green. January opened around $3700 so I don't think we will fall beneath that level any time soon. If we don't then the inverse H&S should be still in play. Now, I am not saying that we definitely won't fall below $3700, but I am willing to keep my longs open for a while still. The risk/reward is too good for me (I'm wiling to bet against 6 consecutive months in red, an historic first).
Comment:
It's becoming really really hard to know what's going on. BTC is lacking conviction. While most ALTS are pushing up. The total crypto market without BTC is making a bull pennant
Total crypto marketcap with BTC is making a inverse H&S stuck at the neckline
BTC hourly chart a potential BART move
If BTC breaks up then the inverse H&S will play out with target around $5300
If it breaks down then first real support is around $3600. If this one holds then maybe we can try to go up again otherwise I am thinking something like this could happen:
Look, I'll be honest. I am not a fan of giving both an upward direction and downward direction. That's just too easy. However, at the moment it's extremely hard to predict a direction since there are many mixed signals. For example, last BTC jump happened on low price which is bearish, shorts are down down and longs are up, another bearish signal. However, the total crypto marketcap and BTC patterns tells us that there is room to go up. At the moment I am not seeing much convinction so it's possible that the bart move happens. Hopefully $3800 holds, if no $3600 needs to hold. If they get taken out then chances are we test the bottom again.
Total crypto marketcap with BTC is making a inverse H&S stuck at the neckline
BTC hourly chart a potential BART move
If BTC breaks up then the inverse H&S will play out with target around $5300
If it breaks down then first real support is around $3600. If this one holds then maybe we can try to go up again otherwise I am thinking something like this could happen:
Look, I'll be honest. I am not a fan of giving both an upward direction and downward direction. That's just too easy. However, at the moment it's extremely hard to predict a direction since there are many mixed signals. For example, last BTC jump happened on low price which is bearish, shorts are down down and longs are up, another bearish signal. However, the total crypto marketcap and BTC patterns tells us that there is room to go up. At the moment I am not seeing much convinction so it's possible that the bart move happens. Hopefully $3800 holds, if no $3600 needs to hold. If they get taken out then chances are we test the bottom again.
Comment:
$3600 broke, which in my opinion should have caused a bigger dump to around $3350, however only a $100 (barely) dump. Doesn’t make much sense, so it’s provably a bear trap and price should recover to around $3750 from here. But BTC is too manipulated this past week, price action is weird, almost as trying to shake out both bears and bulls day after day. I can’t predict manipulation, while TA says we should test the 200-ma on the weekly ($3250) or the 50-ma on the monthly ($3030), my gut says we will see a rally to $3750. Volume is too low and it’s allowing for too much manipulation. It’s irritating to say the least.
Comment:
Well my gut was right and there was a rally, volume is not great and the push seems to have lost some steam even before reaching a resistance at $3735.
Now, if price breaks the blue channel but doesn't dump this could be yet another bart move that will takes us back down. If prices breaks the channel upward but doesn't make it through the resistance at $3735 repeatedly then odds are it will drop after some brief consolidation. The only way for this to be bullish is to decisively break $3735, make a bull flag while still holding $3735 and then up again.
Now, if price breaks the blue channel but doesn't dump this could be yet another bart move that will takes us back down. If prices breaks the channel upward but doesn't make it through the resistance at $3735 repeatedly then odds are it will drop after some brief consolidation. The only way for this to be bullish is to decisively break $3735, make a bull flag while still holding $3735 and then up again.
Comment:
analysis continues here
