I have the bitcoin chart on the left and the ethereum chart on the right. Bitcoin is primed to go through one of the core but often missed patterns in trading. The lead in line in black was support for months and some clear bounces are shown with the black arrows. The line is slipped as support in dramatic fashion at the blue arrow and asserted as resistance at the orange arrow. The pattern played out clearly in etheureum and has a high probability of playing out on bitcoin within days. The black circle on the bitcoin volume histogram shows that despite the spikes in buying volume days overall volume in this uptrend is falling. Generally falling volume is a sign that an uptrend is going to reverse.
Ethereum's prices action fell to between the 0.618 and 0.786 fib retracement levels but the wedge was clearly more downward pointing than what we see developing on bitcoin. I colored both retracement levels in red but with the angle of bitcoin support right now it certainly does look like the retracement, if it occurs, will more likely than not go to between 0.50 and 0.618. A break of the bitcion wedge support would be a major break of market structure and extraordinarily bearish.
The only reason I can see bitcoin pumping right now is because the smart money is waiting to short at the orange arrow. Smart money is waited to sell and right now price action is just above the 0.236 level retracement level. Looking back in October that level was wicket pretty hard and price action fell right to the .050 level.
Further that, Bitcion and ethereum are often correlated over 95% so if ethereum/bitcion is falling then generally both are falling, but ethereum is falling quicker. So below is the ethereum/bitcoin chart and it seems like a safe bet that the price action will retrace to the bollinger band base line. Price action hit the 3rd standard deviation and that is a great sign that we found a top.
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I am using the 2d chart to fit a bit more data and to combine some candles so you don't have to do it mentally. We are clearly stalling at my rising orange trendline. There has been some fine tuning but mostly at the origin. If we impuse down powerfully past the rising blue trend line, as I have said elsewhere, it is basically game over for bitcion and we can go sub-$1,000. If price action finds the blue line as support then it is to 30k, easy.
The final option is price action mounts the long term resistance without a significant dip, the trend line flips to support (or a horizontal level flips to support and we are off to the moon.
I am in my short, I have my stop outside both trend lines, hopefully I am safe for this dip and can take some decent profits.
Time to stop with your doom and gloom. You’ve been massively wrong for the past two months.
This_Guhy
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@TuParkShakur, My last crypto post was calling ethusd to pump long term from about 165 to 500, and that was a pretty bullish call in a timely manner, based on resistance turning to support. You would have had a great entry into ETHUSD if you read that post and took the trade
The same principles on that post which was a long term target setting with a fib extension are the same principles on this post with a fib retracement. A trend line changes from support to resistance or vice versa and if you charted it right and trade it right you can ride a very impulsive move. Painting a massive bullish flag on btcusd and thinking that this pattern will retrace less than ETHUSD did in the same formation isn't doom and gloom. BTCUSD could break resistance here and that would be very bullish.
But the fact is we are at major resistance with limited upside at this time. Below is btcusd in the arithmetic scale and bollinger bands. There is not a whole lot of upside possible Price action is at the 2nd st. dev BB and a retrace to the lower limit of that BB is a very technical call. All the space right now is to the downside. Basic TA calls for price action to constrict before an impulsive move to either side and that is what the wedge is doing.
Below would be the bullish resolution of this formation on the log chart which puts bitcoin near all time highs.
I am bearish short term on silver and gold in the short term because I think a retrace to long term support is possible, based on the current high amount of selling volume at resistance but I am still calling for silver to to to over $35 in the long term.
It doesn't always go up, and we are at several very strong resistance levels, technical and psychological. Trading is trading, protect yourself to either side, and have a scenario of it it breaks to either side. If this breaks bearish a very technical call is to buy the supports I have shown you. If we pump a very technical place to take profit is the wedge target I showed you. Not advise, not a financial adviser, not a certified market technician, and all that.