So it's been a while since I have been excited about Bitcoins price action. We had a breakout on Monday which negated a bearish flag that was in play (See related ideas for more information on our previous analysis) and price still appears to be rallying! Price not surprisingly moved sideways after the big up move which was likely due to hesitation.
Price is rallying and approaching the long term side-wards resistance at 6380, which converges with where the 50 moving average will act as a resistance. If price breaks above the side-wards structure and the 50 moving average, price could always use the 50 moving average as a support.
With price being down for so long, even seeing a compelling update such as this is exciting, especially in a space where moves generally happen with high amounts of volume and spontaneity.
There is 2 ways price will behave over the next few days:
- Price breaks side-wards resistance at 6380, breaking the 50 moving average. If this occurs, we will want to see a retest on the side-wards resistance as a new support level. Once there is a confirmation the line is being used as support, I can consider a buy opportunity up to the resistance zone target at 7190.
- Price hits side-wards resistance at 6380, also finding resistance on the 50 moving average. If price stalls here, it is likely price will fall back into structure and retest within structure, likely not getting any lower than 5710 before going back to the upside again
Bear in mind that if price breaks structure, it is very important to wait for a retest. With Bitcoin's late volatility and unpredictability (In high volumes), you need to be nimble making trades and follow strict trading order of operation and engagement rules to keep your capital safe.
Also bear in mind that the breakout of structure will likely hit a resistance which geometrically lines up with where the bearish flag support line turned resistance meets! This means if it breaks down and retests the long term side-wards support on my chart, it could have a lot of difficulty breaking the flag resistance retest level at around 6880! This is extremely important to note, and for this reason I only recommend highly experienced traders take that retest trade for the long run. Novices are likely to get burned.
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Price is rallying and approaching the long term side-wards resistance at 6380, which converges with where the 50 moving average will act as a resistance. If price breaks above the side-wards structure and the 50 moving average, price could always use the 50 moving average as a support.
With price being down for so long, even seeing a compelling update such as this is exciting, especially in a space where moves generally happen with high amounts of volume and spontaneity.
There is 2 ways price will behave over the next few days:
- Price breaks side-wards resistance at 6380, breaking the 50 moving average. If this occurs, we will want to see a retest on the side-wards resistance as a new support level. Once there is a confirmation the line is being used as support, I can consider a buy opportunity up to the resistance zone target at 7190.
- Price hits side-wards resistance at 6380, also finding resistance on the 50 moving average. If price stalls here, it is likely price will fall back into structure and retest within structure, likely not getting any lower than 5710 before going back to the upside again
Bear in mind that if price breaks structure, it is very important to wait for a retest. With Bitcoin's late volatility and unpredictability (In high volumes), you need to be nimble making trades and follow strict trading order of operation and engagement rules to keep your capital safe.
Also bear in mind that the breakout of structure will likely hit a resistance which geometrically lines up with where the bearish flag support line turned resistance meets! This means if it breaks down and retests the long term side-wards support on my chart, it could have a lot of difficulty breaking the flag resistance retest level at around 6880! This is extremely important to note, and for this reason I only recommend highly experienced traders take that retest trade for the long run. Novices are likely to get burned.
Please leave a LIKE and follow. This will motivate me to post more analysis.
Thank you for your support.
When price hit the side-wards resistance, price got weaker and fell into structure as planned.
Now, price has hit a short term support level and the candlestick behavior is healthy at this level, this could be the bounce level to be a buyer.