I posted my last long term BTC update in July discussing that, at the time when we were at $13K, we would most likely get pulled back to between $6-$8K, based on the fib levels and a healthy overall retracement.
Now that we have hit that target, and as we are kissing the .618 (yet again), I have been getting hit up on social media and by friends about where we look to move to next and bounce from. Below are my thoughts on where we are and where we are headed themed by trading element:
STRUCTURAL:
I see people often comparing this to the descending triangle of 2018 and how we most likely sell off to a bottom as we did in 2018. I disagree with this analysis, but agree in that we look more than likely (70%-ish I would put it at) that we re-test $6,500 and more than likely head to $5,500-$6,000. My overall assessment is that, while we can look left in the charts, I believe the current BTC pattern we are seeing does not have an equal in its history. It is more of a combination between the 2018 Bear descending triangle and the 2014 Bear rounded curve (down) chart pattern. If we were to compare the pattern, similar in these ways:
1. More like the 2018 descending triangle in that it is following a defined pattern - though currently in falling wedge versus descending triangle of 18'
2. More like 2014 in that this pattern is more than likely to bottom in a capitulation 'V' bottom. This is based on the thought that we need to find a bottom, and unlike having a descending triangle, there is no one specific level we will fall through to give us capitulation.
I think a nice V bottom, maybe with an inverse H&S in the coming weeks, could provide the juice we need to get back into bullish momentum.
VOLUME AND INDICATOR:
My first thought is that volume wise, this looks like a healthy chart and industry. Though BTC did not pump to $20K and above this year (and it will not, sorry to ruin your Christmas plans), overall volume dwarfs that of 2017-2018 Bull/Bear cycle, a huge positive. Specific to this current 2019 YTD cycle in isolation, overall this looks and smells like a falling bullish wedge. Price action is falling, volume is relatively flat for this wedge, with some really nice green wicks. Current volume has ticked off a little, meaning we most likely are due for a corrective wave down (as projected in my chart). This clearly looks like price being driven down by the bulls as best as possible to re-accumulate, something I am planning to do as well as advising those around me.
From an indicator perspective, we have room to fall on high time frames (weekly, monthly, 3 day) to lows for RSI, MacD and the like. I think this is just indicative that there is room to the downside. Remember in December 18' we hit a daily RSI of 9. Not close to that at the current moment.
NEWS CYCLE and 2020 OUTLOOK:
My best guess is that we get a good sized pump, maybe to $11k on the low to $17k on the high, prior to the bitcoin halving before we muddle around middle of next year. I believe post halving (May 2020), we will bottom again and then moon, $100k, lambo, etc. (save it for another long term analysis).
TL/DR + OVERALL WRAP-UP:
I cannot say this enough, but $2K, and bottoming out and crypto being dead, will never happen. Descending wedge, with good overall volume, is indicative we are re-accumulating in my opinion. Most likely we bottom at $5,500 - $6K (this is maybe overly specific) in a V type pattern. Most likely a wick below the falling wedge we are in, and look for a pump early into 2020 to be a fake-out for the halving, but something that should be more than playable.
Another viable option is swinging at $7k and moving out the wedge flat, with volume fading into 2020. This would be the less exciting option, but something very viable none-the-less.
I would consider the bullish alternatives, but if we do begin pumping from here on out, it will mean a rise outside of the descending triangle, over $9,200 as it stands today, and if that happens, a review of this analysis and a fresh look will take place.
Happy trading.
Now that we have hit that target, and as we are kissing the .618 (yet again), I have been getting hit up on social media and by friends about where we look to move to next and bounce from. Below are my thoughts on where we are and where we are headed themed by trading element:
STRUCTURAL:
I see people often comparing this to the descending triangle of 2018 and how we most likely sell off to a bottom as we did in 2018. I disagree with this analysis, but agree in that we look more than likely (70%-ish I would put it at) that we re-test $6,500 and more than likely head to $5,500-$6,000. My overall assessment is that, while we can look left in the charts, I believe the current BTC pattern we are seeing does not have an equal in its history. It is more of a combination between the 2018 Bear descending triangle and the 2014 Bear rounded curve (down) chart pattern. If we were to compare the pattern, similar in these ways:
1. More like the 2018 descending triangle in that it is following a defined pattern - though currently in falling wedge versus descending triangle of 18'
2. More like 2014 in that this pattern is more than likely to bottom in a capitulation 'V' bottom. This is based on the thought that we need to find a bottom, and unlike having a descending triangle, there is no one specific level we will fall through to give us capitulation.
I think a nice V bottom, maybe with an inverse H&S in the coming weeks, could provide the juice we need to get back into bullish momentum.
VOLUME AND INDICATOR:
My first thought is that volume wise, this looks like a healthy chart and industry. Though BTC did not pump to $20K and above this year (and it will not, sorry to ruin your Christmas plans), overall volume dwarfs that of 2017-2018 Bull/Bear cycle, a huge positive. Specific to this current 2019 YTD cycle in isolation, overall this looks and smells like a falling bullish wedge. Price action is falling, volume is relatively flat for this wedge, with some really nice green wicks. Current volume has ticked off a little, meaning we most likely are due for a corrective wave down (as projected in my chart). This clearly looks like price being driven down by the bulls as best as possible to re-accumulate, something I am planning to do as well as advising those around me.
From an indicator perspective, we have room to fall on high time frames (weekly, monthly, 3 day) to lows for RSI, MacD and the like. I think this is just indicative that there is room to the downside. Remember in December 18' we hit a daily RSI of 9. Not close to that at the current moment.
NEWS CYCLE and 2020 OUTLOOK:
My best guess is that we get a good sized pump, maybe to $11k on the low to $17k on the high, prior to the bitcoin halving before we muddle around middle of next year. I believe post halving (May 2020), we will bottom again and then moon, $100k, lambo, etc. (save it for another long term analysis).
TL/DR + OVERALL WRAP-UP:
I cannot say this enough, but $2K, and bottoming out and crypto being dead, will never happen. Descending wedge, with good overall volume, is indicative we are re-accumulating in my opinion. Most likely we bottom at $5,500 - $6K (this is maybe overly specific) in a V type pattern. Most likely a wick below the falling wedge we are in, and look for a pump early into 2020 to be a fake-out for the halving, but something that should be more than playable.
Another viable option is swinging at $7k and moving out the wedge flat, with volume fading into 2020. This would be the less exciting option, but something very viable none-the-less.
I would consider the bullish alternatives, but if we do begin pumping from here on out, it will mean a rise outside of the descending triangle, over $9,200 as it stands today, and if that happens, a review of this analysis and a fresh look will take place.
Happy trading.
Comment:
Looks like the 618... again, ruled the day. Both on the run up to $13K in the baby bull of 2019 and baby bear of second half 2019.
There was a front run from $6,200 as we only got as low as $6,400, but this looks like it is the interim bottom and we will not be testing this anytime soon.
BTC is so trade-able, this pattern is following my trend lines to the T, except higher than originally anticipated. Buckle up.
There was a front run from $6,200 as we only got as low as $6,400, but this looks like it is the interim bottom and we will not be testing this anytime soon.
BTC is so trade-able, this pattern is following my trend lines to the T, except higher than originally anticipated. Buckle up.
I think as low as $5,400, and high as $6,400 are in the range of reasonableness. Below $5k and, well, all bets are off.
Why do I still think this? Longs are levered severely to the upside, which will create a nice wick down to the bottom to flatten the longs and shorts ratio.
Secondly, with the halving approaching, I am expecting a bull run/potential fake out before may, some sort of bottoming action post halving to start the real up trend into 2021 and into 2022.
Best of luck this year all. Let's do this.