BITMEX:XBTUSD   Bitcoin / US Dollar Perpetual Inverse Swap Contract
I'm becoming increasingly interested in this bullish scenario.

NB: I'm still flat at the moment, with a bearish leaning. We have been making lower highs and lower lows on the daily so the trend is bearish . So this shouldn't be used to satisfy a bullish bias. Take it as consideration for now.

With all that said, the following can't really be ignored without at least some consideration to an alternate scenario from the continued downtrend.

  • 1) Very strong horizontal support at roughly 68xx, which was tested as resistance many times during the bottom reversal. This has now flipped to support. That was a lot of selling in that area, a lot of buying.
  • 2) Very strong diagonal support running from March. This has some precedents, and there have been at least 3 other diagonal supports which have paved the way for reversals previously.
  • 3) We have arrived at a position where the above discussed horizontal and diagonal S/R levels have conjoined with both playing as support now. This is why I believe we have seen such large amounts of protection in this area recently.
  • 4) IHnS reversal, into support retest. If this area is broken it would invalidate the IHnS as a actual bottom. It would simply be a IHnS in the middle of a larger downtrend.
  • 5) Daily RSI looks reasonable to push up again, close to 40. Now we have had lower RSI's previously, however if we are now in an uptrend it wouldn't be abnormal for that to bottom out at 40 and rise higher, as we have seen it do recently up closer to 80. Similar situation we had from Oct to Dec last year.
  • 6) The H4 shows a clear support in this diagonal line. As well as a double bottom of it. Double bottoms being consistent reversal patterns.

There are other factors which support a reversal here such as Ichi cloud daily, but I've avoided using too many past S/R and RSI as it can then lead into a game of trying to find more and more things to support your bias.

On a macro perspective, just talking freely. We have seen much of the money in Crypto consolidate into BTC during this uptrend. This was borne out by the relatively stable marketcap of Crypto in general. Money from alts have drained into BTC . We've had a brief respite as BTC came crashing down a few days ago, and money poured back into alts. We are starting to see those same alts reverse - So where will that money go? At this point in the game, it's unlikely that will be money taken out. It's likely to stay in the Crypto ecosystem. Much of the inital push into BTC was the result of the ETF news. Perhaps now people are noticing (if Twitter is anything to go by, this is true) that alts are pretty much dead, and they are questioning whether alts will ever return to ATHs. Perhaps that's why money is coming back into BTC now. I think this is important.

Regarding bottoms in BTC . I'm not convinced we'll see some of the really low bottoms that people have been calling for. 2-4k BTC for example. I tend to think that opportunity has long gone in 2018. If you weren't an early adopter, too bad. Roughly 6k seems to entice a lot of buying.

If we were to reverse here, I would think alts would continue to get smashed. However I do think it would be extremely bullish for BTC as it would represent the very first higher low on the larger TF for months.

All in all, I'm flat - and I have presented a bearish scenario in a previous post which detailed why I think 6k is a reasonable target. So for now between these two choices, I'm going to wait for confirmation and some sort of strong or even gradual push up or down.

Breaching the hori/diag support would be very bearish .

Making a new higher higher would be very bullish .

Comments

Excellent, thank you.
+1 Reply
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