Many traders keep expecting Bitcoin to keep falling, but it doesn't want to give up. Bitcoin continues to hold the 200 weekly SMA, which has historically been the support level in a bear market.
For the second time in a row, Bitcoin has formed a falling wedge pattern on the daily chart and had a successful break out. This was a great opportunity for a low risk entry. Volatility and volume were decreasing and Bitcoin was approaching strong support: a double bottom as well as the 200 week SMA. Even though Bitcoin broke out of the falling wedge with increased volume, the move was met with resistance from the 50 day EMA. The 50 day EMA has been resistance for months now and I would like to see Bitcoin get above it, but it doesn't need to become strong support (as we saw in this last bull run where it was frequently broken). This will be a level to keep an eye on.
I just posted an analysis on Litecoin and why I'm bullish there and I think that continued bullishness with Litecoin can help Bitcoin gain some momentum. Litecoin gained momentum before Bitcoin after the last bear market and it may do it again and is worth keeping an eye on.
Ultimately though I am watching the 200 week SMA on Bitcoin, that is the line in the sand for me. If Bitcoin can stay above it and continue to treat it as support, then that will be a bullish sign to me and i'll be happy as a buyer above that line because I know my risk. And if it closes a daily candle below that would be a very bad sign in the short to medium term and I would have to re-evaluate my position at that time.
I post these charts as I see them in real time on Twitter, so follow me for more frequent ideas / updates! My twitter link is on my trading view profile page.
*This is not financial advice. For entertainment and educational purposes only.
BTCUSD H4 Correction up. Checkout the idea detail's and all the update's for the complete picture.
BAM_USD
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@Boon2, counting waves is a little too subjective for me. So many different ways to see them that the likelihood many people seeing them the same way and a trade working out is too low imo. That's great if it works for you though, thanks for sharing!
Boon2
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@BradMetz, The regular way most EW'ers count is defiantly subjective and doesn't work plain and simple, but I don't count that way and have taken the subjectiveness out of my counting. Evey one that knows the rules I follow will come up with exactly the same count!
andrewthesage
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BAM_USD
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@andrewthesage, yep, still in bear territory for now. But I like the low risk of buying near the 200 week SMA. Also litecoin is showing signs of life again and led the last bull market. I definitely would not short right now, not unless the 200 week SMA is broken. Thanks for sharing!