I warned throughout that the entire bounce off of support that the rally was not healthy and a breakdown needs to occur. We got the breakdown right out of the symmetrical triangle that has formed over the last several months.
What IS healthy is this breakdown, I would rather see moves like this instead of a unhealthy rally delaying the inevitable. Corrections are good in order for a market to remain sustainable, keep in mind this is good for Bitcoin and when we find our bottom we will come out of it stronger than last years parabolic trend.
I urge you to read my past analysis published here to get an understanding of our markets path.
Weekly Overview (Above)
Looking here on the weekly, I have Heikin Ashi turned on above to get a clear view of the trend.
Below I have our traditional candles on with the T.D. sequential. (See my past educational pieces on using the T.D. linked below) I am watching for a full or near full 1-9 count on this current trend before a reversal. However, finding a bottom here temporarily is not out of the question this week.
That being said we are not out of the woods until confirmation of a real bull trend on the daily kumo break. If we drop below the weekly kumo then the market structure has changed and we have a different story.
The weekly is showing a on the OBV ( ) & the is near bottomed. The C.M.F. is still showing slight negative pressure, I wouldn't do too much reading into the weekly indicators though. In the world of crypto trading, the weekly indicators often correct from our smaller time frames; I do take note of them though.
The GMMA (Guppy Multiple Moving Average) shows me that we are in a oversold area below our EMA's, but that the bear trend is still strong.
3 Day Overview (Below)
There is a slight showing on the OBV, not much but it is there for now.
Daily Overview (Below)
on the OBV is present on the daily also. The C.M.F. has finally showed some positive pressure, this is good do to the fact we haven't seen this since late May.
The & are quickly looking for a bottom. However be aware of false bottoms on the as can be seen from May 12th through the 28th.
12 Hour Overview (Below)
The T.D. Sequential gave us a 9 buy signal. However, it is not a perfect setup as the 9th candle did not close below the 7th candle. I like the 9th above or below (depending on trend) the 7th & the 8th above or below the 6th . In this case we got the 8th below the 6th but not the below the 7th.
The here appears to need more room to bottom. I would've like to see the settle a bit more here instead of pushing up at support with very little movement. It is not too worrisome but this signals to me typically that we have some unhealthy attempts at a rally.
We do not see a lot of room to move down on the RSI & STOCH. However, looking at the larger picture of the STOCH and the RSI on the bottom chart below, the STOCH trends to two scenarios in this market; We either bottom and immediately move upward convincingly with the STOCH or we chop that ultimately leads to a price breakdown. In this case it appears like the latter is happening.
Looking at the RSI and this level, the 3 support lines I have in blue make a reasonable place to place bids. The GMMA shows us a string bear trend without a bottom sowing at this current price level.
The C.M.F. is showing heavy sell pressure here at support, this is always concerning to me as I want to see this trend faster into the positive at support.
Hitting the 9 buy setup on the T.D. sequential still had me leery. Everything appeared in order but being patient and watching for the price flip I wanted to see at least a 5 push, we failed at 4. I would like to see once move down before we trust the T.D. on this time frame.
2 Hour Overview (Below)
The OBV is showing a slightly higher level then it should be, nothing major but I am watching for this to spike further upwards after another drop to confirm that the market is buying the next support. Also the Stochastic seen below has some room to move downwards before settling for a rally.
45 Minute Overview (Below)
Berish TK cross on the Ichimoku. (Kijun-sen crossing the Tenkan-sen )
This much pressure on the C.M.F. (Below) with the STOCH & RSI showing a exaggerated Bearish divergence tells me one thing; The buy pressure will ultimately fail to break through. Please note this divergence can potentially hold this price level and still collude with the price if enough time is given. I would like to see broader price action with the highs to confirm this as a real exaggerated Bearish divergence.
If the C.M.F. remains strong and the STOCH & RSI bottom out without a major drop then we can begin to watch for a a Bullish divergence. Keyword WATCH.
I am keeping an eye on this formation to repeat like the highlighted structure below. Difference will be the buy pressure is stronger, this indicates not as strong as a sell off. I imagine a number of long positions will panic close if we get the drop into my range seen though.
30 Minute Overview (Below)
The OBV is at low levels, but the C.M.F. shows a spike in buy pressure. To interpret this I look at it logically, Buy pressure is pushing beyond previous levels in an attempt to breakout, but the actual buy volume is being outpaced by the sell volume. Here with flat price action this is indicative of a incoming breakdown.
I am looking for a lower bottom on the STOCH & RSI without breaking the green dotted support at $6,679 to cancel a drop to our lower supports. Otherwise we continue to be at unhealthy levels yet again which lead to a breakdown. Like the 4 hour, I wasn't satisfied with the red 9 on the T.D. sequential as that candle did not close below the 7th.
How will I be trading this market? With proper risk management, setting tight stop losses above breakout zones with a short, and setting stop losses below support in a long.
If I get my bids filled at $6,410, $6,465 & $6,517, I will be placing my stops extremely tight at $6,350, and right below each of the other 2 supports as we rally back up past them. Using a trailing stop is not out of order in this market either.
While I wait for larger moves I will be trading smaller time frames. For those trades I will be watching for the RSI and STOCH to bottom or top within the channel below this paragraph. On each top or bottom within this channel I will be placing my stops at the breakout above or below the channel. As I trade these I watch higher time frames to confirm positions. If I see a bottom on a smaller time frame I will move to the higher time frames to confirm that we don't have any underlying issues that may overpower the trade.
Bitcoin has some Bullish signals developing on higher time frames, but also some Bearish ones on smaller time frames, a short drop to my zone in blue aligns with the market. From there I will watch to see if these Bullish signals play out. As for our ultimate bottom, as I mentioned previously in other posts i will be monitoring each support level as they come for some truly Bullish confirmations. I have detailed many resting points and support levels below this current price in past overviews.
As a note, the shorts are stacking higher BITFINEX:BTCUSDSHORTS compared to longs BITFINEX:BTCUSDLONGS . So it is entirely possible to see rapid liquidations within this channel before dropping down. The spike in shorts happened after we dropped to this price level. This worries me that the market is yet again creating unsustainable positions. Do not be that trader and pick all your entries wisely, patience is key in day trading.
"Patience is not simply the ability to wait - it's how we behave while we're waiting." -Joyce Meyer
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That said, nice thorough analysis (as usual).
Much appreciated :)