Hi guys,
Last week came with a lot of negative news for Bitcoin, starting from the Chinese government putting a ban on local exchanges in China, followed by Jamie Dimon saying that Bitcoin is a fraud. All these and more has created panic selling of the pair BTCUSD.
For now we are not going to get carried away by all the negative news, but try to focus on it's effects on the price charts of BTCUSD as well as the market capitalization.
WEEKLY OVERVIEW
First of all we have been anticipating a bearish divergence from one of our posts on BTCUSD weekly charts. It is now here on 10-09-2017, check out the weekly chart below showing a Regular bearish divergence on the pair. This chart also shows the weekly chart closing below the upper bound of the weekly bullish channel.
WEEKLY CHART
4 HOURLY OVERVIEW
As an old time chartist and trader, i know that jumping into a trade based on a weekly chart divergence alone is like jumping in front of a pendulum bob which has not yet exhausted its current swing. So what i did was to take a closer look into the 4 hour chart(H4 chart) for a better entry setup. This chart shows 2 divergence patterns. One happening currently at 16th hour (19-09-2017), and another that occurred on 4th hour - (12-09-2017). Check the chart below.
4 HOUR CHART
MARKET CAPITALIZATION
From the chart below, we will notice a drop in the market capitalization in the month of September similar to the decline in
July. Making a comparison, we should be aware that the effect of the decline in market cap in July did not come with a negative bearish divergence on the price chart, like we are experiencing now in September.
MARKET CAPITALIZATION IN JULY
MARKET CAPITALIZATION IN SEPTEMBER
PROJECTIONS
Based on the above mentioned facts, which have proven to be effective in previous times, i'm expecting the pair (BTCUSD) to get to the previous week's low of $2966.00.
Long term positional trader should not panic, giving that the weekly time frame is still in an upward channel which has not yet been nullified. However taking advantage of the profit taking opportunities as analyzed in the weekly charts would have been an advantage.