Guess who's back, back
Back again
Magic's back, back
Tell a friend
What's up world!? After several much needed days away from the markets, and some pure Las Vegas insanity, I'm recharged, refreshed, and ready to slay these markets! So, without further ado, let's see what's happening with Bitcoin! Looking at the four hour chart, you can see that bitcoin has made some significant advancements, which I'm sure you're all aware of. If you recall from my last post, I said "Since BTC has broken out above the downtrend channel, and is now finding support on the 200 EMA (in purple,) we could see a test of the 1200 EMA (in red.) However, you can see that there is currently some resistance in the way, in the form of the falling black dotted trendline . BTC is currently testing that level, so it will be critical in determining the forward path from here. A breakout above the black dotted trendline could send BTC up to test the 1200 EMA, but a rejection could send BTC back to the 200 EMA, and potentially lower."
As you can see, the black dotted trendline was surpassed, and the 1200 EMA was rapidly overcome. This is very significant, and very bullish price action, particularly because the 1200 EMA on the four hour chart is equal to the 200 EMA form the daily chart. So, Bitcoin has surpassed the 200 EMA on the daily, and that is very important. Additionally, Bitcoin has managed to print some higher lows and highs. The downtrend on the log chart has also been surpassed, so the bullishness is undeniable at this point. Critical levels continue to fall, but I'm still not prepared to buy into this market, because major overhead resistance still remains. We're getting close to my buy level, but we aren't there yet. I know a lot of my followers don't understand this logic, and that's perfectly fine. I've said it before, and I'll say it again. I am a trader by nature. I'm not a long term investor. I don't care how far an asset moves — I don't care where it is, or how many percentage points it has gained or lost. I am concerned with finding high probability of success, low risk trades. People can say what they like, but buying into the crypto market, on the breakout of 4/12, was not a low risk trade, because there was so much overhead resistance. Obviously, a lot of that resistance as fallen, but at the time, it was not a wise trade to make based on the risk of overhead resistance. That's especially true, given the persistent strength of the bear market. That's why I have maintained a bearish stance. Yes, the market broke out. But breakouts fail all the time. I'm obligated to give sound information, and telling people to buy into a breakout with massive overhead resistance is not good information. Instead, I urged people to remain cautious, because any one of those overhead resistance levels could have produced a reversal. With that said, I'm still not convinced that the bottom is in, and I do believe that the possibility of sub 6000 prices is still in the cards. A sustained breakout above the 786 could change that view, but that evidence has not occurred yet.
On my last post, I said "I wouldn't want to be a buyer until a confirmed breakout above the 78.6% retrace, at about 9460. From a risk/reward perspective, there is far less overhead resistance there, and that would be a clear sign of a trend reversal in BTC." Just looking at the chart, you can see how enormously reactive the 78.6% retrace has been. So that's the level that I'm most concerned with.
Currently, BTC is consolidating above the 1200 EMA (in red.) However, there is a clear bearish divergence on the MACD, showing a decrease in buy-side momentum. Furthermore, the MACD is printing a bearish crossover, so the momentum is clearly weakening.
Back again
Magic's back, back
Tell a friend
What's up world!? After several much needed days away from the markets, and some pure Las Vegas insanity, I'm recharged, refreshed, and ready to slay these markets! So, without further ado, let's see what's happening with Bitcoin! Looking at the four hour chart, you can see that bitcoin has made some significant advancements, which I'm sure you're all aware of. If you recall from my last post, I said "Since BTC has broken out above the downtrend channel, and is now finding support on the 200 EMA (in purple,) we could see a test of the 1200 EMA (in red.) However, you can see that there is currently some resistance in the way, in the form of the falling black dotted trendline . BTC is currently testing that level, so it will be critical in determining the forward path from here. A breakout above the black dotted trendline could send BTC up to test the 1200 EMA, but a rejection could send BTC back to the 200 EMA, and potentially lower."
As you can see, the black dotted trendline was surpassed, and the 1200 EMA was rapidly overcome. This is very significant, and very bullish price action, particularly because the 1200 EMA on the four hour chart is equal to the 200 EMA form the daily chart. So, Bitcoin has surpassed the 200 EMA on the daily, and that is very important. Additionally, Bitcoin has managed to print some higher lows and highs. The downtrend on the log chart has also been surpassed, so the bullishness is undeniable at this point. Critical levels continue to fall, but I'm still not prepared to buy into this market, because major overhead resistance still remains. We're getting close to my buy level, but we aren't there yet. I know a lot of my followers don't understand this logic, and that's perfectly fine. I've said it before, and I'll say it again. I am a trader by nature. I'm not a long term investor. I don't care how far an asset moves — I don't care where it is, or how many percentage points it has gained or lost. I am concerned with finding high probability of success, low risk trades. People can say what they like, but buying into the crypto market, on the breakout of 4/12, was not a low risk trade, because there was so much overhead resistance. Obviously, a lot of that resistance as fallen, but at the time, it was not a wise trade to make based on the risk of overhead resistance. That's especially true, given the persistent strength of the bear market. That's why I have maintained a bearish stance. Yes, the market broke out. But breakouts fail all the time. I'm obligated to give sound information, and telling people to buy into a breakout with massive overhead resistance is not good information. Instead, I urged people to remain cautious, because any one of those overhead resistance levels could have produced a reversal. With that said, I'm still not convinced that the bottom is in, and I do believe that the possibility of sub 6000 prices is still in the cards. A sustained breakout above the 786 could change that view, but that evidence has not occurred yet.
On my last post, I said "I wouldn't want to be a buyer until a confirmed breakout above the 78.6% retrace, at about 9460. From a risk/reward perspective, there is far less overhead resistance there, and that would be a clear sign of a trend reversal in BTC." Just looking at the chart, you can see how enormously reactive the 78.6% retrace has been. So that's the level that I'm most concerned with.
Currently, BTC is consolidating above the 1200 EMA (in red.) However, there is a clear bearish divergence on the MACD, showing a decrease in buy-side momentum. Furthermore, the MACD is printing a bearish crossover, so the momentum is clearly weakening.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-Magic loves you-
-JD-