Bitcoin Daily Update (day 213)

I believe that it is possible to beat the market through a consistent and unemotional approach. This is primarily achieved through preparing instead of reacting. Click here to learn more about how I use the indicators below and Click here to get my complete trading strategy! Please be advised that I swing trade and will often hold onto a position for > 1 month. What you do with your $ is your business, what I do with my $ is my business.

My most recent Bitcoin Bubble Comparison led to the following predictions: 1 day - 28 days = < $5,750 | bottom prediction: $2,860 by 10/30
Previous analysis / position: “In markets like this it is often best to wait for the real trend to start. Trying to position yourself before the real move happens can often cost more than it is worth. Why not wait for the real breakout/down to happen, wait some more to make sure that it is not a fakeout and then enter on the throwback?” / Sidelines
Patterns: Descending triangle / 4h h&s
Horizontal support and resistance: S: $6,575 | R: $6,640
BTCUSDSHORTS: Still trying to create a higher low, could be forming a bear flag.
Funding Rates: Longs pay shorts 0.0159%
12 & 26 EMA’s (calculate % difference): Both still acting as support and trying to make bullish crossover
50 & 128 MA’s: 50 is currently acting as support | 128: -3.12%
Volume: Volume continues to dry up as we consolidate
FIB’s: 0.382: $6,933 | 0.5: $6,776 | 0.618: $6,619
Candlestick analysis: Daily and 12h are forming dojis. 4h has a bit of a shooting star from last candle.
Ichimoku Cloud: Daily cloud is no longer a part of the resistance cluster but it is still fully bearish. Currently inside 4h cloud which shows strong resistance at $6,760. Could use 4h cloud as no trade zone.
TD’ Sequential: Weekly R2 = R1 | 3d G4 | Daily G3 = G2
Visible Range: In highest liquidity zone over last year and above the point of control
BTC’ Price Spreadsheet: 12h: +0.6% | 24h: +0.6% | 1w: -1.25% | 2w: +5.95% | 1m: -5.3%
Bollinger Bands: Continues to support above MA. It is considered bullish when price consolidates on top of MA during super squeeze.
Trendline: Top end of descending triangle is at $6,900 - $7,000
Daily Trend: Chop
Fractals: Up: $6,822 | Down: $6,320
On Balance Volume: Bull div’ on weekly
ADX: ADX continues to fall without much more room to go. Indicates upcoming trend.
Chaikin Money Flow: Bull div’ on daily
RSI (30 setting): D: 48.89 | W: 49.1
Stoch: Attempting to make bullish re cross on weekly while trying to make bearish re cross on daily

Summary: In day 209 of the Bitcoin Daily Update I identified a potential head and shoulders on the 4h chart and the price continues to fit inside that pattern. Now there are two key trendlines to keep an eye on.

The first is the neckline (blue) of the h&s pattern. It is slanting upward and $6,540 is currently where it would breakdown. That is in line with horizontal support and if that breaks down then I expect the price to retrace to my next key trendline (green).

The lower green trendline has held up the price since August 18th. If that breaks down and fails to quickly bounce back then I believe it will foreshadow the eventual breakdown of the descending triangle.

If the price continues to rally then I will be watching for major resistance from $6,785 - $6,900. Keep in mind the possibility of a fakeout. When the Bollinger Bands squeezes this tight it will often result in a head fake before the real trend starts. A pump to $7,000 - $7,200 would be a perfect bull trap. That is why it will likely be best to wait and then wait some more before making the next entry.

Patience and preparation will provide the largest edge over the next couple days/weeks.