Hi Guys,
First off, this is not advice, nor is it science or a prediction, this is just to discuss price action.
So, looking at the charts over the last couple of days, specifically at the Relative Strength Index, I noticed that Bitcoin has been at its highest oversold level since.... ever. Additionally, despite the recent appreciation and inflows, the RSI is still at tame levels, sitting around 50. This being said, there is a clear uptrend in the RSI suggesting a potentially overbought Bitcoin in the near future. (A)
On top of that, we are seeing MACD action that we haven't seen since mid-2017 with a rising trend from extreme lows with a bullish crossover, closing the signal gap. (B)
Additionally, looking at the general price and volume trends, you can see that there is clear and present bullish support at $3200 as evidenced by the morning Doji star pattern formed on December 15. (C) Now, considering the increasing volume of the past 4 days, it seems fair to assume that BTC is going to at least test the first resistance around $4200. (1)
If the bulls succeed in their efforts to clear that threshold, I see room for further appreciation to the $5600-6400 range. (2) Though it is a stretch.
This being said, BTC bulls have had many disappointing turnouts in previous setups. Indeed, Bitcoin has been pretty in line with Bollinger Band theory and the 61.8% Fibonacci level. As such, I see two scenarios were bulls could be in for a rough ride.
1 - Bitcoin appreciates to test the $4200 resistance bringing the price range close to the top of the bands. Considering how the market responds in these setups, and cognizant of the rising RSI trend, it is likely that Bitcoin would fall back to the lower band. Now, depending on the severity and velocity of the ascent, the fall will be soft or hard. Seeing that Christmas is at the corner, I would hope Santa blesses us with a soft landing ;)
2- Considering Bitcoin's long-lasting history with the 61.8% Fibonacci level, how likely is it that we would clear that $5200 spot? To be honest, no one knows. This being said, this doesn't mean you can't expect some things to be more likely than others and prepare for them. If you remember October 2017, you will remember that the $5200 level was the support line for Bitcoin prior to its meteoric rise. So, considering its past significance, I don't think that a normalization around $5200 is out of sight.
So, what do you think? Looking at the technicals, I am very undecided, but then I start thinking about fundamentals. Remember how Tom Lee found that 95% of BTC's price action is explained by wallet creation and transaction output? I hope you do because we are only in the early stages of price discovery for this asset class. Just this year, NASDAQ and Bakkt are3 planning to open more futures contract on BTC for 2019, Yale and Fidelity also announced significant moves. So why are we still down? I think its all about misplaced speculation. This is why I want to figure out the best spots to better my dollar cost average for my Bitcoin position. I am not interested in the short market, I want to see this technology thrive, and to do so, I know it will need money, so let it pour in!
Looking forward to hearing what you guys think :)
-TheIntern
First off, this is not advice, nor is it science or a prediction, this is just to discuss price action.
So, looking at the charts over the last couple of days, specifically at the Relative Strength Index, I noticed that Bitcoin has been at its highest oversold level since.... ever. Additionally, despite the recent appreciation and inflows, the RSI is still at tame levels, sitting around 50. This being said, there is a clear uptrend in the RSI suggesting a potentially overbought Bitcoin in the near future. (A)
On top of that, we are seeing MACD action that we haven't seen since mid-2017 with a rising trend from extreme lows with a bullish crossover, closing the signal gap. (B)
Additionally, looking at the general price and volume trends, you can see that there is clear and present bullish support at $3200 as evidenced by the morning Doji star pattern formed on December 15. (C) Now, considering the increasing volume of the past 4 days, it seems fair to assume that BTC is going to at least test the first resistance around $4200. (1)
If the bulls succeed in their efforts to clear that threshold, I see room for further appreciation to the $5600-6400 range. (2) Though it is a stretch.
This being said, BTC bulls have had many disappointing turnouts in previous setups. Indeed, Bitcoin has been pretty in line with Bollinger Band theory and the 61.8% Fibonacci level. As such, I see two scenarios were bulls could be in for a rough ride.
1 - Bitcoin appreciates to test the $4200 resistance bringing the price range close to the top of the bands. Considering how the market responds in these setups, and cognizant of the rising RSI trend, it is likely that Bitcoin would fall back to the lower band. Now, depending on the severity and velocity of the ascent, the fall will be soft or hard. Seeing that Christmas is at the corner, I would hope Santa blesses us with a soft landing ;)
2- Considering Bitcoin's long-lasting history with the 61.8% Fibonacci level, how likely is it that we would clear that $5200 spot? To be honest, no one knows. This being said, this doesn't mean you can't expect some things to be more likely than others and prepare for them. If you remember October 2017, you will remember that the $5200 level was the support line for Bitcoin prior to its meteoric rise. So, considering its past significance, I don't think that a normalization around $5200 is out of sight.
So, what do you think? Looking at the technicals, I am very undecided, but then I start thinking about fundamentals. Remember how Tom Lee found that 95% of BTC's price action is explained by wallet creation and transaction output? I hope you do because we are only in the early stages of price discovery for this asset class. Just this year, NASDAQ and Bakkt are3 planning to open more futures contract on BTC for 2019, Yale and Fidelity also announced significant moves. So why are we still down? I think its all about misplaced speculation. This is why I want to figure out the best spots to better my dollar cost average for my Bitcoin position. I am not interested in the short market, I want to see this technology thrive, and to do so, I know it will need money, so let it pour in!
Looking forward to hearing what you guys think :)
-TheIntern
Well, looking at the daily chart, the path to $5200 depends on how today's candle is going to look like. Indeed, after two days of bulls activity, bears almost took back control yesterday, bringing yesterday's close almost to the same level as it was two days ago. Moreover, the RSI is still at tame levels, and the MACD has ways to go before entering positive territory.
This being said, when you look at the 4h chart, there seems to be a different story. In the 4h, RSI is firmly overbought and has been for the longest time since the July peak and bust. Moreover, looking at the MACD, we came close to a bearish crossover yesterday, but without success, and we are now well extended on the positive side. Yet, the volume is still on the rise, and it is very green.
So, what do you think, are we going to hover around $4200 for the holidays, or are we shooting up to $5200?