BREAKOUT WILL HAPPEN (PART II) for KRAKEN:XBTUSD by Rainman2

Here you go guys and gals. I wanted to wait until I would come off as less of the crazy bullish guy. Now that DarkEnergy has put up a post about SPY crashing, check out my 'Recession Commeth' chart posted on 4/2. I saw what he's just now seeing a month ago, but I came to a radically different conclusion.

We have bull pennants forming across multiple timeframes, and indicators are turning bullish. As I've said in previous posts, each time BTC hits resistance and does not drop more than 5% in price, it becomes stronger (what doesn't kill you...). More eyes are drawn in, more wallets make ready to pull the buy trigger, and we start accumulating momentum. In the end, momentum is all you need. Lucky for us though, all those indicators that seemed to be on the fence, they are all about to shift rocket fuel bullish, right as soon as the 100SMA crosses over the 200. But we already knew that was going to happen, didn't we?

If anything in my assessment changes, posting an updated status will be my first todo. So enjoy the ride, don't get shaken up with minor dips (they are bound to happen), and let's plan on reassessing our present course when we bump up against 10k.

Happy Trading!

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This is just Bitcoin, the alts will move at their own speed:

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you wouldn't be getting these updates if you didn't like or follow ;)

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Here's an estimate of time using an overlay from a similar period last year:

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Obviously, I didn't account for the possibility of prolonged sideways action within a rectangle after bumping up against 11.5k, when using trend lines to estimate the time frame shown in the previous comment. As they say though history often repeats, so it will be something to watch out for once we hit the summit.

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I'll be honest here and say that I thought the breakout would be a lot stronger, given the number of patterns completing at the same time. It's making me a little uneasy actually. Hopefully, we'll see some more force once the inv hs finishes around the 9050 range.

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Here's the divergence yshashmi37 points out in the comments section:

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Always nice when the news collaborates your analysis:

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Good morning guys, please be prepared for an explosive jump as we get near 9050. Once that price point is breached, we'll be skyrocketing up to the Domed House. Right now we are creating points 19 and 20 of that pattern. As you can see point 21 is almost a straight verticle jump up from point 20. As you may have guessed from the pattern shown in the link below that we might experience a slight dip as we create point 20, before the jump up to point 21. 9050 is the point at which an inverse hs completes, or the one can is plainly visible anyway, there are a few what I would call invisible hs completing around the same time. That last part is an area where a lot of technical guys might disagree with me, as it really depends on the placement of the neckline and whether or not you believe you can essentially use the same structures for multiple inv hs patterns. In my experience, it works, although the rules have to be modified a bit to conform to the fractal nature of the pattern.

So the biggest takeaways here is that we are inside of a 3 Peaks and Domed House pattern (take a look at the link to see what that looks like), and that we are almost at the point of jumping up to the Domed House. I personally have my signs on 11.5k, blowing right past 10k once that 9050 mark is reached so this is not something you want to miss.

Additional note on the link below, this might look like a 90s era website, but it is a treasure trove of information, I'd recommend that you dig through it if you're interested in doing your own analysis.

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sooo many typos... sorry :D

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While we wait, here's a better idea of the exact path the price might take once breakout happens. We are creating fractals of the 3 Peaks and Domed House as we go up, essentially at the horizontal point at which our Big W pattern is confirmed. That means every Domed House that gets created then goes on to become the 3 Peaks for the next Domed House. Here's how that might look once we move past this juncture. Please also note that the Domed House, pattern-wise, must finish with a drop from the tallest peak to somewhere around the 3 peaks. This means that once we have our breakout, and we create the 3 peaks of the Domed House, you should be prepared for a large correction, as pictured.

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As you can see, we've seemed to have stalled out a bit. So I'm sure you guys have seen the comment by yshashmi37 below as well as tops from some of the top guys talking about a bearish divergence. Just so you guys can get a clear picture of what we're dealing with I think it's best if we step backwards and see the whole picture. This so-called bearish divergence is just the latest in a series of divergences which have gotten us to where we are right now. I'll start with the very first, or what I call the 'pivot' divergencce:

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oops wrong picture, although the one above is important too, here's the pivot:

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see where those two blue lines are? the one on the chart is slanting downards, while the one on the RSI indicator is slanting upwards. Now this is a bullish divergence, basically the indicator is telling us that the price should be going up, while the price is actually going down, the usual result of this is that the price goes up, as you can see. Now the second divergence:

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as you can see the blue line on the RSI indicator is slanting downwards, while the blue line in the equivalent place on the chart is slanting, well kind of straight, kind of downwards - basically it doesn't know what it's doing. This kind of divergence is a bearish one, where the indicator is saying that the price should be going down, but the price stays the same or goes up. This usually means that prices will come down. But why Rainman, did prices continue to go up? Well, that's a very good question :). And I'll answer that once we get to divergence #3:

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Divergence 3 is more or less where we are now, or have been for the last few days. RSI is telling us that the prices should be going down, but we keep climbing up - or sideways depending on your point of view. How do you reconcile these pieces of information? Well first, divergence indications aren't the end all be all, and while they will almost definitely tell you that the bulls and bears are engaged in a struggle, it won't tell you definitely whether prices will go down or up. Like most other indicators, you have to take an indication of bullish or bearish divergence wholistically, as you what is this telling me about the general trend of the price. In this case not much. These bearish divergences are simply telling us that there is a struggle between the bears and the bulls, and fortunately for us that the bulls are winning. What most of the guys calling for a dip aren't quite realizing is that divergences have to be looked at in totality. I'll point you to the blue lines shown below:

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as you can see the divergence actually started way back in the middle of March. With the RSI telling us that prices should be climbing up, while the price continued to plummet down. As you can see, the price has made a V like shape pivoting itself at the first bullish divergence, and attempting to correct itself so that it follows suit with what the RSI is indicating that it should be doing. Aka the bearish divergences are minor blimps in an otherwise significantly large bullish divergence about to complete so that the price and indicators are in sync. This is why I know that there will be no significant dip in price until a point in time that the synced balance is again thrown off. When we look at the daily chart, we see a clearer indication that the price and indicator are in sync:

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and there are no indications that the sync will be broken anytime soon. So relax and enjoy the show :)

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momentum indicates buy across all time scales. I say this a lot but I'll say it again to clarify one of my central beliefs about price movements: momentum is all we need.

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100 just crossed over the 200 on the 4hr... if the price doesn't start moving quickly up, then I would start to get worried.

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there is a chance we might drop down to the second blue line around 8750 before moving up. Should that second blue line be broken... we don't want that second blue line to be broken...

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we have movement up...

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we're waiting for a spike in volume

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volume is trickling in

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we're going to hit the second blue line

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if we do, we'll want to see the price bounce back immediately

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the 20SMA circled in purple will provide support:

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If we don't have a breakout in either direction, and we keep kind of treking upwards at a glacial pace, then that takes 12k out of the picture. And I'll have to put up a new chart, but it would put us in a new slowly slopping downward channel. One that most people won't be able to recognize for a long while. It would just look like we're moving sideways. But let's hope that doesn't happen and we get some movement. Even if we get pushed down to 8200, which I don't think we will, but if we do, even that kind of movement will be enough to spark a light under slow poke bitcoin over here.

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price is refusing to drop below the first blue line, my neckline for an inv hs. This can only point to an imminent breakout (although we've been fooled before)

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It came right up to the second blue line and retracted back, as I suspected the 20SMA is acting as support, at least for now

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getting closer to the second blue line. Note that the 20SMA is sitting exactly at the blue diagonal line which is the trend line up at was formed after we had out 1k breakout 2/3 weeks ago. So I wouldn't be shocked if the price hit 8700.

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There's a bear flag forming on the 15min, which tells me that a further drop in price is likely.

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A drop down to 8400 is now possible:

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Ok, guys, be prepared for a drop down to 8350. If it does it'll it the 50SMA. If it drops any more than that. I will probably exit my long position. I would put the price dropping to that level at 50%. Dropping below that at 5%.

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it'll hit

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this might look like an evening star, but I assure you that it's not:

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Bulls are fighting back we still haven't hit the second blue llne

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I am not exiting positions unless we drop below 8000. Dropping down to 8200 will be possible. In either case, if the 2 patterns we have been looking at hold true, then the breakout will be right after this drop. So this is probably a stay glue to your screen situation.

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Just to remind you of our pattern. Breakout in this instance means an almost straight up shot to 11.5k. Not joking.

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WE NEVER HIT THE SECOND BLUE LINE!!!!! The 20SMA did act as support as I suspected it would (thank god). Now is a good candidate for that breakout...