We all want to know which direction is Bitcoin headed. Up or down? We could flip a coin and take a chance, or we could read the chart. We will soon have our answer in a day or two which direction BTC is headed.
When I looked at the 4 Hour chart today, an interesting pattern emerged. These July dumps we've been having are incredibly symmetrical.
Pattern #1
Forms an ellipse, with the price bottom at the midpoint of the ellipse. The price recovers to just below where it started. Notice the "W" pattern inside the ellipse. When the price reaches the same height as the left side of the ellipse, it dumps and eventually forms the top of the next ellipse.
Pattern #2
This ellipse is almost identical to the first. It even has the same "W" pattern inside of the ellipse. Coincidence? Notice again the bottom of the dump is in the middle of the ellipse. When the right side of the ellipse rises to equal the left side, it dumps to form the 3rd ellipse.
Pattern #3
This ellipse is slightly different on 2 points. The bottom of the dump is not in the center of the ellipse, and there is not much of a "W" pattern (if any) inside of the ellipse. The right side of the ellipse now equals the left side. Will it dump from here?
Notice the ellipses are getting smaller and it reminds me of the Russian Matryoshka dolls where one fits inside of the other. The dumps are not as extreme as the prior dump. The bottom of the 3rd ellipse is the same price as the 2nd ellipse. Another coincidence.
The red trend line that started in late April, acted as support for the bottom of the 2nd ellipse and also prior to the formation of the 3rd ellipse. It now appears to act as support when the price exited the 3rd ellipse. But will this support last? Or will it turn into resistance?
We have 2 directions to go.
Bullish Trend?
If the red trend line continues to act as support, then the price will break out of this pitchfork downtrend that it has been in since early July. The price must also move above the 200 EMA (purple line) and the blue 60 EMA for BTC to remain bullish. If the price falls below the red trend line, or the 200 EMA, or the blue 60 EMA then the price has turned bearish again.
Bearish Trend?
If the price falls below the red trend line and the blue 60 EMA, then we are headed down to the strong support zone around 8500. The only way to avoid this support zone is to get back above the 60 EMA. This 60 EMA is quite powerful in that the price has been under it for most of July. Only when the price moved above the 60 EMA are we given a glimmer of hope that the bull trend is back.
So there you have it. On the 4 hour chart the red trend line and the 2 EMA's will determine whether BTC has turned bullish or is headed down to 8500.
Don't forget to hit the Like button before you leave.
When I looked at the 4 Hour chart today, an interesting pattern emerged. These July dumps we've been having are incredibly symmetrical.
Pattern #1
Forms an ellipse, with the price bottom at the midpoint of the ellipse. The price recovers to just below where it started. Notice the "W" pattern inside the ellipse. When the price reaches the same height as the left side of the ellipse, it dumps and eventually forms the top of the next ellipse.
Pattern #2
This ellipse is almost identical to the first. It even has the same "W" pattern inside of the ellipse. Coincidence? Notice again the bottom of the dump is in the middle of the ellipse. When the right side of the ellipse rises to equal the left side, it dumps to form the 3rd ellipse.
Pattern #3
This ellipse is slightly different on 2 points. The bottom of the dump is not in the center of the ellipse, and there is not much of a "W" pattern (if any) inside of the ellipse. The right side of the ellipse now equals the left side. Will it dump from here?
Notice the ellipses are getting smaller and it reminds me of the Russian Matryoshka dolls where one fits inside of the other. The dumps are not as extreme as the prior dump. The bottom of the 3rd ellipse is the same price as the 2nd ellipse. Another coincidence.
The red trend line that started in late April, acted as support for the bottom of the 2nd ellipse and also prior to the formation of the 3rd ellipse. It now appears to act as support when the price exited the 3rd ellipse. But will this support last? Or will it turn into resistance?
We have 2 directions to go.
Bullish Trend?
If the red trend line continues to act as support, then the price will break out of this pitchfork downtrend that it has been in since early July. The price must also move above the 200 EMA (purple line) and the blue 60 EMA for BTC to remain bullish. If the price falls below the red trend line, or the 200 EMA, or the blue 60 EMA then the price has turned bearish again.
Bearish Trend?
If the price falls below the red trend line and the blue 60 EMA, then we are headed down to the strong support zone around 8500. The only way to avoid this support zone is to get back above the 60 EMA. This 60 EMA is quite powerful in that the price has been under it for most of July. Only when the price moved above the 60 EMA are we given a glimmer of hope that the bull trend is back.
So there you have it. On the 4 hour chart the red trend line and the 2 EMA's will determine whether BTC has turned bullish or is headed down to 8500.
Don't forget to hit the Like button before you leave.
