Bitcoin could still go down. Read the chart not your heart.
A few things to note about what we could be seeing. BTC is currently ranging higher on a lower timeframe creeping towards 10k after multiple rejections and there is an overall bullish rally across all markets which reflects in the majority going lev. long. As a trader I tend to observe pivots and momentum in the pattern with few indicators to keep things simple. RSI, Volume and Price.
For those who have been in crypto for a while. They will notice that the RSI for BTC often forms arcs which give indication of momentum and with price, divergence. If you do not understand RSI divergence, simply look up “Divergence Cheat Sheet” on google to follow along.
We are currently at the first lower low after an overbought peak in the daily RSI which currently represents the apex. Rewinding back to June 2019, we can see that the first significant lower in RSI produced a higher lower in price (Hidden continuation divergence). It is up to the price after significant periods of divergence to provide an understanding of market sentiment. In June, 2019 it was bullish until the higher high of $14k produced reversal divergence again and it was up to the next impulses upward to break the high which were unsuccessful as the momentum shown in the RSI pulled the price down.
Fast forward to today. We have produced our first lower low (Purple “LL”) on the RSI after being over bought with reversal divergence (blue). We see that the price gives an opportunity for bulls to enter here to drive the price up. Although it was a higher high in price ~$10.4k, it is not enough to break resistance and again produces reversal divergence (Green & blue).
As you can see there is potential here for more draw down to occur before a strong retest of the $10k level. Namely, RSI producing a lower low and when bouncing, having stronger price action.
This is likely to occur soon given that the volume has completely declined and traders are uncertain. VPVR shows that there is liquidity at the $8.6-8.7k level to be held if the next move up is to send BTC into an official bull market. Breaking this level however, could signify a confirmed reversal. Lower low in price and lower low in RSI.
That being said, the irrational buying could occur sending the price upward (creating HTF H/H therefore bullish) despite these indicators. If you are to short at these levels, set a stoploss above 10.5k. Breaking $8.6k levels could begin a mid-long term bear market, given that there have been high time frames lower highs and lower lows without fail.
For those who have been in crypto for a while. They will notice that the RSI for BTC often forms arcs which give indication of momentum and with price, divergence. If you do not understand RSI divergence, simply look up “Divergence Cheat Sheet” on google to follow along.
We are currently at the first lower low after an overbought peak in the daily RSI which currently represents the apex. Rewinding back to June 2019, we can see that the first significant lower in RSI produced a higher lower in price (Hidden continuation divergence). It is up to the price after significant periods of divergence to provide an understanding of market sentiment. In June, 2019 it was bullish until the higher high of $14k produced reversal divergence again and it was up to the next impulses upward to break the high which were unsuccessful as the momentum shown in the RSI pulled the price down.
Fast forward to today. We have produced our first lower low (Purple “LL”) on the RSI after being over bought with reversal divergence (blue). We see that the price gives an opportunity for bulls to enter here to drive the price up. Although it was a higher high in price ~$10.4k, it is not enough to break resistance and again produces reversal divergence (Green & blue).
As you can see there is potential here for more draw down to occur before a strong retest of the $10k level. Namely, RSI producing a lower low and when bouncing, having stronger price action.
This is likely to occur soon given that the volume has completely declined and traders are uncertain. VPVR shows that there is liquidity at the $8.6-8.7k level to be held if the next move up is to send BTC into an official bull market. Breaking this level however, could signify a confirmed reversal. Lower low in price and lower low in RSI.
That being said, the irrational buying could occur sending the price upward (creating HTF H/H therefore bullish) despite these indicators. If you are to short at these levels, set a stoploss above 10.5k. Breaking $8.6k levels could begin a mid-long term bear market, given that there have been high time frames lower highs and lower lows without fail.
Comment:
Currently in profit in a 5x short position. Daily is currently playing out to the downside and there is market wide downside. This could be a sign of reversal and may confirm the top of the epic V shape recovery. Are we going to enter a W? Intention is to let this trade play out as per my target above. If there is weakness in bounces, there are opportunities there to add to the position.
