Bitcoin Price Action Update (day 353)

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Consensio: Remains fully bullish after we failed to get a death cross on the 4h with the 50 and 200 EMAs.

Patterns: Inverse head and shoulders
Horizontals: Resistance zone from $10,800 - $11,000
Trendline: Bear:

Bull:

Lucid SAR: If looking for SAR based on Welles Wilder’s original calculations then use “Lucid SAR” on Trading View. 4h is bullish. Daily and Weekly are bearish.
Funding Rates: Longs pay shorts 0.01%
TD’ Sequential: W G6 | 3D: R5 | D price flip
Ichimoku Cloud: Weekly is starting to c clamp. D bearish TK cross but support found from cloud.
Relative Strength Index: Just brokethrough 50 on daily
Average Directional Index: 4h and daily indicate chop (ADX < 20)
Price Action: 1m: +17.71% | 2w: -2.6% | 1d: +4.05%
Bollinger Bands: Price bounced from bottom daily band and is now testing MA.
Stochastic Oscillator: Daily buy signal worked well. Weekly sell signal still in play.

Summary: When trading crypto there is no rest for the weary. In a market this volatile it is crucial to be flexible and ready to change one’s disposition as the drop of a dime.

Strong opinions loosely held.

Over the past few weeks I have been expecting a deep correction back to $7,500 - $8,600. That is mainly due to the following:

Weekly Lucid SAR turned bearish
Wyckoff Distributions identified on 4h - 12h
Within a whisker of death cross on the 4h with 50 and 200 EMA’s
First weekly stochastic sell signal since Dec 2017
Extreme Contango in the futures markets strong indicator of a top. Click here to read more.
Price fell below the 2w high for the first time during this run
Finally, this is all following a massive move from $3,200 to $13,800 in less than 6 months

The evidence of another big leg down was overwhelming. I sold the majority of my spot at $11,000 and tried shorting twice. First when price was above $11,000 and then when we fell to $10,500. Both had very tight stops that were triggered shortly after entering.

Since I was betting against the long term trend I had a very small position and therefore the losses were but a flesh wound.

Now that the price appears to have avoided the death cross on the 4h and is in the process of confirming an inverse head and shoulders I am starting to look for places to buy back my spot.

Originally I was planning on buying a 4h close above $10,800. After more analysis I have decided to wait for additional confirmation. What I will be watching for from here:

4h & Daily close above the horizontal resistance zone outlined above.
Daily close above the Bollinger Band MA
4h & Daily ADX crossing 20

As usual I like to enter large positions in pieces, no more than 30% at a time. I reentered 15% of X today. The plan from here is to start adding about 15% - 25% of X if / when we get the confirmations outlined above.

Here is the most interesting charts for me right now.

Bullish reversal candle on the weekly that looks like it will close above the trendline. If that was the local low then it would establish the second higher low which could be used to draw in a trendline. When that is done it starts to look very much like a new Phase 2.

Comment:

I remain short term bullish as long as the price is above $10,600 on a closing basis. If that breaks down then it would likely lead to the death cross on the 4h chart with the 50 and 200 EMA's. Until them expect both to be support.

4h:

1h:

Comment:

$10,600 brokedown but I'm still in my long position. My stop loss is a death cross with the 50 and 200 EMA's. Also keeping a close eye on $10,200. If we can support above that area then it would create a higher low following the higher high.