The last 3 months have been nothing but ranging chop and have humbled many traders.
I am not a big fan of trading ranges, but have had some good trades nonetheless playing the support and resistance levels.
I've also had my fair share of stop losses hit in the nasty stop hunts on the low liquidity margin exchanges.
That being said, I did find this really interesting historical trend for Bitcoin that I wanted to share with you guys!
As always, I don't keep anything to myself. Some people actually get mad at me for sharing some of my edges with the community. (you should read the messages I get.)
I don't really care about that as I just love to share my findings with you guys and let you decide what you want to do with it.
After the initial impulse out of the bear market, Bitcoin loves to form an extended consolidation pattern lasting an average of 22 weeks in duration before touching the 20 period weekly moving average and continuing into its bullish uptrend.
Triangle patterns often represent 50/50 patterns, and depending on how you draw the lines on this current formation, you can get either a descending triangle or a near symmetrical triangle.
Here are all of the important diagonal support/resistance and areas of interest I am watching: SUPPORT = .236 from Local Price Action – $10,189 20 DMA – $10,182 Support Zone – $10,139 – $10,111 100 DEMA – $9841 Large Triangle Pattern – $9348 Support Zone – $9333 – $9078 21 WEMA – $9227 Local Downside Trend – $8869 – Broke with no retest
RESISTANCE = 9 DEMA – $10,298 Support Zone (Remains “Support Zone” until Candle Close) – $10,403 – $10,354 100 DMA – $10,378 Swing-Fail Trendline – $10,417 50 DMA – $10,451 Trend from 100 DMA Wicks – $10,795 Local Price Action .382 – $10,894 Channel – $11,022 Weekly Resistance Zone – $11,382 – $11,532 Local PA and ATH to 2018 Low 50% Fib Level – $11,462-$11,464
We should also not forget the futures chart as there are several gaps that are currently unfilled that we want to keep our eyes on.
AOI (AREA OF INTEREST) = CME Gap North – $11,695 – $11,795 CME Gap South – $8985 – $8515
Taking a look at Bitmex, we can see this pattern forming as well.
As you can see, it looks like we may be coming to a decision point within the next 3-6 weeks, which would also line up with the average duration of the previous consolidation patterns.
In both cases, it's important to follow the former trend as they typically continue to move in the direction of the former trend.
As long as we can hold the 20MA on the weekly as support, then I believe we will eventually make our way out of the triangle and break upwards as we've seen several times in the past.
What do you guys think?
Let me know in the comments below and post some charts! I love to see what you guys are coming up with as well.
Markets don't have a past, we can ''TA'' all day long but fundamentals come first, and fundamentals tell us that with the BAKKT exchange official launch in just a few days, it will be the ideal platform for ''heavy hitters'' to short bitcoin. (remember Bill Gate's comment about bitcoin?) Moreover, you also have to remember that this insane increase from $3-4k levels up to almost 14K in just a few months was mainly driven by institutions as opposed to retail investors. For any meaningful price increase retail investors on a global scale must also once again start buying bitcoin (good ol' supply & demand law) It will eventually happen when the average Joe and Jane realize that their fiat currencies are essentially useless when the next unprecedented recession/depression takes place in approximately 18-36 months from now. In my opinion, btc price will probably fall to $7-8k levels in the next month or so and this is when the greatest buying opportunity will occur. Don't get me wrong, I am definitely long on btc in the long-run, it's only a matter of time before btc skyrockets to 6-figure levels unless we have a major ''black-swan' event (i.e. 51% network attack etc.)
andre4536
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@GuruMeditation, Some guy interviewed planB and put it on his podcast. PlanB talks about bakkt. Shone some light on it for me at least. I found it a very interesting podcast
@andre4444, thank you for the link, great coversation!
andre4536
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@donnguyen1022, Glad you enjoyed it! Just trying to share the knowledge.. the more ya know right!?!
BorisPoff
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@GuruMeditation, what PlanB guy points out in that podcast from andre is to short bitcoin one will need to buy bitcoin. This becomes significantly more difficult than throwing more fiat in fiat settled contracts. Shorting bitcoin on Bakkt may be a very dangerous game.
GuruMeditation
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@BorisPoff, I watched that podcast yesterday, it was a good one, but I was already aware of that fundamental difference between BAKKT and other platforms a long time ago. I agree with you that it is a significantly more difficult and complicated matter, but in my opinion the core objective of those heavy hitters as I call them, is to buy as low as possible. You can rest assured that they have the means to actually shake off the so-called ''weak hands'' and buy at prices they feel comfortable.