TradingShot

BITCOIN has turned full PARABOLIC! Is there a danger zone?

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
After yet another analysis which I looked into Bitcoin's longer term bullish dynamics and how the Ichimoku Cloud just gave the strongest Bull Signal possible, I have switched back to the short term. This study is focused on how the shorter term levels can impact the trend.

** BTC is full Parabolic **
Well that should come as no surprise, BTC is on a parabolic course since the November low (even before the December bottom). The channel perfectly fits the last two touches on the lower trend-line but is now trading the longest (since the beginning of January) close to this trend line . Since we are near the 10350 1W Resistance level , that should ring an alert.

** The Channel Up **
For the more traditional ones, there is also a Channel Up (dashed lines) that is also supporting this uptrend, since the January 3rd touch. Every Higher Low on this Channel has been on the (roughly) symmetrical line from the previous Higher High (see the green bold lines). This is basically what is keeping the momentum alive, as traders sell on a High and then buy back (making a Higher Low) on the symmetrical line made by the previous High.

** The RSI Rising Wedge **
Among those bullish patterns, here comes another, on the RSI this time, which may reveal something important about the trend. We see a Rising Wedge , which is practically close to exhaustion as the Highs are flat-lined around 70.000 - 71.000. This indicates that buying momentum is gradually running out of steam and a pull back may be in order.

Based on all the above, as long as Bitcoin doesn't break the 10350 1W Resistance, chances are to see first the Parabolic channel breaking and then the Channel Down to the downside. The zone between the two is displayed on the chart by the orange Triangle, and that is perhaps THE MOST IMPORTANT AREA for the short term. The price is neutral within it but bullish/ bearish outside. If we do break below it indeed, the in my opinion the most likely level of retrace is the 0.500 Fibonacci at 8200. This is because it has also been both a Higher High and Higher Low on the Channel Up (see the green lines). A break above the Resistance though, sustains the bullish trend gained by the parabolic and Channel Up patterns.

Do you agree with the above? Let me know in the comments section!

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P.S. Check out the previous (and very popular) idea on the strong Ichimoku Bull signal that I talked about at the beginning:

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Comments

it appears that no one dares to short these days,... I mean these are no ordinary times before halving, which makes any substantial drop almost unlikely.
+4 Reply
mbc47 SajjadSaberi
@SajjadSaberi, so it is ready to drop big then
+3 Reply
mbc47 mbc47
@mbc47, it is very simple; don't use high leverage :)
+1 Reply
@mbc47, buying pressure is huge still...lets see what happens next
+2 Reply
mbc47 SajjadSaberi
@SajjadSaberi, it is low volume; don't trust it one bit
+1 Reply
TradingShot SajjadSaberi
@SajjadSaberi, 10350 - 10400 is key.
+4 Reply
TradingShot SajjadSaberi
@SajjadSaberi, Let's see how this week goes.
+2 Reply
prefabsprout SajjadSaberi
@SajjadSaberi, This is clearly the pre-halving-dump pump. How far they can drag it up remains to be seen. Come March April May we should see hilarious sell-off as the halving approaches. Will be fun to see how low it can get bought up.

FUN!
Reply
SajjadSaberi prefabsprout
@prefabsprout, Anything is possible. after all, the dynamics between supply and demand is susceptible to psychological factors outside the market.
Reply
Good Analysis!
This is my recent work on Bitcoin. Here I provide one more important resistance zone, if that zone will be past we get the price to be unstoppable
+3 Reply
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