Hi guys, I wanted to write up another analysis before I leave for vacation tomorrow.
So once again the whales have everybody confused and have kept the price in this 8.2-8.3k range all day at an area where the price can honestly go either way.
What makes the most sense in this situation is to see more downside until we reach the 0.618 fib level (in red) or anywhere in the major support zone (green) before we can look at a potential reversal.
As many of you know, I have been very bearish on Bitcoin even during the entire April rally. But when I see something that sticks out to me, I will always make it my duty to let you guys know.
With that said we can see on the chart that the price has not been able to break under the S3 support trend line and hold there long enough to consider it broken.
Another very important indication of potential upside is the 4hour bullish divergence on the RSI, CMF, and MACD. Now, there is still a good chance the price will drop enough to bring these indicators down and eliminate any divergences we see now. That would be the best scenario for the bears. And it’s hard to tell right now, but even if price drops down to the major support zone, the RSI and CMF might not drop far enough down to eliminate the divergences, and we could still see a bullish divergence from down there which is my number 1 scenario.
If this 4 hour bullish divergence holds, be prepared to see some massive upside. The last time we saw a bullish divergence on the 4hour was right before the big pump in early April after accumulation, so we might see something similar here.
Just keep a close look at these divergences, you guys will need to draw it out on your own charts since TradingView play button does not load new data for the indicators, only on the price action.
So please keep your eye on that because this is really the only strong indication I have right now for a potential bullish setup.
If this breaks down however and divergences are no longer in play, then I will stick to my original plan which is for a reversal to occur anywhere in the major support zone.
Good luck guys!
Trend Line Key
R1 = Resistance trend line formed from Dec 2017 high (19.7k) through 9.7k and 9.5k (April)
R2 = Support-turned-resistance trend line formed from Sept 2017 low (2.8k) through Feb 2018 low (6k) and beyond.
S1 = Resistance-turned-support trend line formed from the Dec 2017 high (19.7k) through Jan 2018 high (17k) to 11.7k reaction high. This is a very important trend line, that defined the bearish 2018 downtrend
S2 = Support trend line formed from Sept 2017 low (2.8k) through April 2018 lows. This is another very important trend line in which the April rally sprung off from.
S3 = Support trend line formed from reaction lows starting from April 13 through present.
So once again the whales have everybody confused and have kept the price in this 8.2-8.3k range all day at an area where the price can honestly go either way.
What makes the most sense in this situation is to see more downside until we reach the 0.618 fib level (in red) or anywhere in the major support zone (green) before we can look at a potential reversal.
As many of you know, I have been very bearish on Bitcoin even during the entire April rally. But when I see something that sticks out to me, I will always make it my duty to let you guys know.
With that said we can see on the chart that the price has not been able to break under the S3 support trend line and hold there long enough to consider it broken.
Another very important indication of potential upside is the 4hour bullish divergence on the RSI, CMF, and MACD. Now, there is still a good chance the price will drop enough to bring these indicators down and eliminate any divergences we see now. That would be the best scenario for the bears. And it’s hard to tell right now, but even if price drops down to the major support zone, the RSI and CMF might not drop far enough down to eliminate the divergences, and we could still see a bullish divergence from down there which is my number 1 scenario.
If this 4 hour bullish divergence holds, be prepared to see some massive upside. The last time we saw a bullish divergence on the 4hour was right before the big pump in early April after accumulation, so we might see something similar here.
Just keep a close look at these divergences, you guys will need to draw it out on your own charts since TradingView play button does not load new data for the indicators, only on the price action.
So please keep your eye on that because this is really the only strong indication I have right now for a potential bullish setup.
If this breaks down however and divergences are no longer in play, then I will stick to my original plan which is for a reversal to occur anywhere in the major support zone.
Good luck guys!
Trend Line Key
R1 = Resistance trend line formed from Dec 2017 high (19.7k) through 9.7k and 9.5k (April)
R2 = Support-turned-resistance trend line formed from Sept 2017 low (2.8k) through Feb 2018 low (6k) and beyond.
S1 = Resistance-turned-support trend line formed from the Dec 2017 high (19.7k) through Jan 2018 high (17k) to 11.7k reaction high. This is a very important trend line, that defined the bearish 2018 downtrend
S2 = Support trend line formed from Sept 2017 low (2.8k) through April 2018 lows. This is another very important trend line in which the April rally sprung off from.
S3 = Support trend line formed from reaction lows starting from April 13 through present.
Trade closed manually:
While we did get a nice $500 movement upwards a couple days after I posted this, but unfortunately it didn't amount to much more than that. Now the bearish trend has obviously resumed, but I believe we will see upside soon. Please check my latest idea for updates.