*Take your time looking at the chart as you read, since there is a lot to visually take in*
In my last analysis, I outlined how Bitcoin needed to retake the 'key level' at $10,900 for there to be any chance for a meaningful long. Fortunately this hopeful scenario was quickly made redundant, and as expected, once we lost the 'last hope' support, we experienced a sustained selloff down to $8230 (the next support level I had marked), and oscillated around this support level as an EQ as we ranged sideways around it for a month. Market participants seemed to be very confused in this range, as the level proceeded to act as resistance, then support, then resistance again, support, finally containing price below the level and forcing it lower (see arrows on chart).
After failing to close above the $8230 level, Bitcoin experienced a small fall in price to the next support level I had marked at $7430, where I had some low leverage limit orders previously placed which are now filled.
This is where I expect a bounce.
Now the reason I am only very low leverage long here is I think there is a good chance for another, smaller drop to $7100-$7200 level where I have some more limit orders waiting to add size to my position. This is where the real support is, at the confluence of: 0.618 Fib retracement from 3k to 14k (Bull cycle of 2019), as well as the 0.236 Fib retracement of 20k to 3k (Bear cycle of 2018).
Holy shit when I started writing this 20 minutes ago, Bitcoin price was being contained by the 400 EMA level. But price has just gone bezerk! I do not plan to add size here as this could wick back down quite badly (in the last 20 seconds this daily candle has been rejected from the 200 EMA, back to the $8,230 level... again). Expect the unexpected with Bitcoin eh..
It is 2 am and I am very lit so I think I will call it here. If we close back in this range and don't see a massive wick down (it has been a while now and price seems to be holding well so there is increasingly low likelihood of that happening), I can see us ranging sideways until we daily close out of this wedge. However, even if we do close up here, I still think there is a very good chance we drift lower, contained in the wedge, until we revisit (or possibly wick past) the lows at $7,430 and find a local bottom. My bids are waiting for this moment. Consequently, I have closed half of my position to take some profits and will be looking to enter a large position at the 0.0618/0.236 level.
A lot of shorts just got brutally squeezed... I will be expecting some fomo longs here to experience something similar in a few days/weeks.
Always use stops, and look for confluence. Good luck to us all.
*I just noticed, in the bottom pane, the Historic Volatility indicator which has just broken above the trendline I was waiting to break in the next few weeks.. surprised to be honest that was very quick.
In my last analysis, I outlined how Bitcoin needed to retake the 'key level' at $10,900 for there to be any chance for a meaningful long. Fortunately this hopeful scenario was quickly made redundant, and as expected, once we lost the 'last hope' support, we experienced a sustained selloff down to $8230 (the next support level I had marked), and oscillated around this support level as an EQ as we ranged sideways around it for a month. Market participants seemed to be very confused in this range, as the level proceeded to act as resistance, then support, then resistance again, support, finally containing price below the level and forcing it lower (see arrows on chart).
After failing to close above the $8230 level, Bitcoin experienced a small fall in price to the next support level I had marked at $7430, where I had some low leverage limit orders previously placed which are now filled.
This is where I expect a bounce.
Now the reason I am only very low leverage long here is I think there is a good chance for another, smaller drop to $7100-$7200 level where I have some more limit orders waiting to add size to my position. This is where the real support is, at the confluence of: 0.618 Fib retracement from 3k to 14k (Bull cycle of 2019), as well as the 0.236 Fib retracement of 20k to 3k (Bear cycle of 2018).
Holy shit when I started writing this 20 minutes ago, Bitcoin price was being contained by the 400 EMA level. But price has just gone bezerk! I do not plan to add size here as this could wick back down quite badly (in the last 20 seconds this daily candle has been rejected from the 200 EMA, back to the $8,230 level... again). Expect the unexpected with Bitcoin eh..
It is 2 am and I am very lit so I think I will call it here. If we close back in this range and don't see a massive wick down (it has been a while now and price seems to be holding well so there is increasingly low likelihood of that happening), I can see us ranging sideways until we daily close out of this wedge. However, even if we do close up here, I still think there is a very good chance we drift lower, contained in the wedge, until we revisit (or possibly wick past) the lows at $7,430 and find a local bottom. My bids are waiting for this moment. Consequently, I have closed half of my position to take some profits and will be looking to enter a large position at the 0.0618/0.236 level.
A lot of shorts just got brutally squeezed... I will be expecting some fomo longs here to experience something similar in a few days/weeks.
Always use stops, and look for confluence. Good luck to us all.
*I just noticed, in the bottom pane, the Historic Volatility indicator which has just broken above the trendline I was waiting to break in the next few weeks.. surprised to be honest that was very quick.
