in the following, i discuss bullish and bearish scenarios for bitcoin any why i am strongly leaning towards the bearish bitcoin scenario.
i analyze the chart top down which means I start presenting the weekly timeframe chart and work my way to lower timeframe charts
Weekly Timeframe:
>bearish engulfing
>RSI divergence
---are signs that a local top is possibly in. the only way to turn the current price action bullish would be a further consolidation the next 1-2 weeks WITHIN that bearish engulfing candle. a longer conslidation would imply that the price level gets accumulated by whales, hence demand rising.
But Based on history this is almost never the case (check out how a RSI divergence combined with a bearish weekly engulfing played out). Btw i am a price action trader and i only use the RSI as a signal tool to confirm my bias.
fundamental arguments that underline the bearish thesis:
>traditional markets showing big weakness ->btc is heavy correlated to traditional markets
>march statisticly considered as the most bearish month of the year
i analyze the chart top down which means I start presenting the weekly timeframe chart and work my way to lower timeframe charts
Weekly Timeframe:
>bearish engulfing
>RSI divergence
---are signs that a local top is possibly in. the only way to turn the current price action bullish would be a further consolidation the next 1-2 weeks WITHIN that bearish engulfing candle. a longer conslidation would imply that the price level gets accumulated by whales, hence demand rising.
But Based on history this is almost never the case (check out how a RSI divergence combined with a bearish weekly engulfing played out). Btw i am a price action trader and i only use the RSI as a signal tool to confirm my bias.
fundamental arguments that underline the bearish thesis:
>traditional markets showing big weakness ->btc is heavy correlated to traditional markets
>march statisticly considered as the most bearish month of the year
Comment:
bullish scalp scenario
Comment:
bearish scenario
Once the current weekly range breaks down below the January high things are looking awful. A break below the january high would implies that the current monthly candle is printing a bearish WICK on the chart. And after a Wick follows the body expansion... which means red body on a monthly candle! The first logical target would be the January low.
between 2017 High and January low is a high chance for a new accumulation zone...
Once the current weekly range breaks down below the January high things are looking awful. A break below the january high would implies that the current monthly candle is printing a bearish WICK on the chart. And after a Wick follows the body expansion... which means red body on a monthly candle! The first logical target would be the January low.
between 2017 High and January low is a high chance for a new accumulation zone...
the longer the consolidation the stronger the expansion move...
From the comments in the chart i pointed out that bitcoin is already consolidating for several days/weeks within a certain weekly range with zero bullish signs yet. This means Bitcoin is currently in a range environment within these weekly levels (blue). Range Environment = price is in a range between 2 pivotal levels that are capping the price; once a breakout is confirmed the expansion will start.
Let's zoom into lower timeframes to get a clue what price action we need to see for a impulsive move (expansion).
1h timeframe:
the range levels are significant based on the price reaction. in a range environment people lose much money by trying to anticipate a breakout trade.
A Range Breakout is only considered as a breakout WHEN the price holds (consolidates) above/below a range level. IF the price already tested a range level several time the probability increases for a breakout.