Hi traders, thanks again for taking the time to read this and as always I appreciate your continued support!
My last idea I discussed how Bitcoin was consolidating between 2 important areas and while we are still consolidating, it looks like we have some clues as to BTC’s next move.
Looking at the chart, the triangle that Bitcoin was ranging in broke down. This is something many traders were keeping a close eye on and when it broke down I honestly expected a much more violent breakdown or at least a continuation of that breakdown from the initial drop. Instead, over the past couple of days, we see 11,200-11,300 area showing decently strong support.
It’s actually starting to look like a double bottom formation. That 0.382 fib has proven to be a very strong area of interest for the bulls which is surprising to most people as the price has continued to be resisted by this large descending channel (in blue). Most people have been anticipating a large wave down, and while this is still definitely possible, there is a good chance price is going to at least come back up once more to test that blue descending trend line.
Seen here:
But if price comes back up to test again, then it becomes even more likely that price just breaks through it and puts an end to this correctional period we have been in for the past month.
This will be an interesting area to follow in the coming days.
When looking at that support area with the potential double bottom, let’s take a look at the indicators to get a better idea of what’s happening:
Here we can clearly see bullish divergence on RSI, MACD, and Sentiment Index. While divergences can easily be wiped out, typically we see them work out when price action is also confirmation either a top or a bottom.
Additionally, RSI has shown bearish exhaustion right after that first drop, and we haven’t fell below that price since then so this is giving us clues that the bears already exhausted themselves on this move down.
On the weekly chart, the last weekly candle just closed last night and it closed right above the previous weekly SR level. It wasn’t a great close above it however, and we see this week already starting in the red, but the fact that it still closed above is a good sign, and obviously we have several days left for this weekly candle to close so this can easily turn around.
If this trade works out, my initial target is going to be at the descending blue trend line. I will see how price reacts there before taking any profits, because as mentioned before, if we keep knocking at that door, eventually the resistance will break.
My stop loss is set just below the 0.382 fib level, which is a pretty wide stop however I think it’s necessary considering all the wicks down to that level the past couple of days.
I also want to point out that I am not going heavy on leverage or anything like that, as this is a risky spot to open up any trade.
Thanks again for reading this analysis, please give it a thumbs up if this has helped you!
My last idea I discussed how Bitcoin was consolidating between 2 important areas and while we are still consolidating, it looks like we have some clues as to BTC’s next move.
Looking at the chart, the triangle that Bitcoin was ranging in broke down. This is something many traders were keeping a close eye on and when it broke down I honestly expected a much more violent breakdown or at least a continuation of that breakdown from the initial drop. Instead, over the past couple of days, we see 11,200-11,300 area showing decently strong support.
It’s actually starting to look like a double bottom formation. That 0.382 fib has proven to be a very strong area of interest for the bulls which is surprising to most people as the price has continued to be resisted by this large descending channel (in blue). Most people have been anticipating a large wave down, and while this is still definitely possible, there is a good chance price is going to at least come back up once more to test that blue descending trend line.
Seen here:
This will be an interesting area to follow in the coming days.
When looking at that support area with the potential double bottom, let’s take a look at the indicators to get a better idea of what’s happening:
Here we can clearly see bullish divergence on RSI, MACD, and Sentiment Index. While divergences can easily be wiped out, typically we see them work out when price action is also confirmation either a top or a bottom.
Additionally, RSI has shown bearish exhaustion right after that first drop, and we haven’t fell below that price since then so this is giving us clues that the bears already exhausted themselves on this move down.
On the weekly chart, the last weekly candle just closed last night and it closed right above the previous weekly SR level. It wasn’t a great close above it however, and we see this week already starting in the red, but the fact that it still closed above is a good sign, and obviously we have several days left for this weekly candle to close so this can easily turn around.
If this trade works out, my initial target is going to be at the descending blue trend line. I will see how price reacts there before taking any profits, because as mentioned before, if we keep knocking at that door, eventually the resistance will break.
My stop loss is set just below the 0.382 fib level, which is a pretty wide stop however I think it’s necessary considering all the wicks down to that level the past couple of days.
I also want to point out that I am not going heavy on leverage or anything like that, as this is a risky spot to open up any trade.
Thanks again for reading this analysis, please give it a thumbs up if this has helped you!
Comment:
Notice the steady drop in volume on daily time frame:
This is a good opportunity for bulls to take control while bears are already exhausting
Comment:
Bears were able to break this channel and drop it back down to the yellow support range. This is pretty much last chance for bulls to push it up otherwise we will see some downside for many days/weeks to come and this idea is invalid. I am not giving much hope for the bulls anymore after that drop. The selling volume is just too strong now
Order cancelled:
I knew it was a risky trade, thought the setup was there but it was also at the top of that descending channel. This bearish movement down is really bad for the bulls. If we keep dropping like this, it tells us the 2019 bull run is most likely coming to an end.