27/06/2019/11:00CET
Well boys and girls, it happened last night. Bitcoins rally was broken. And at a significant TA point. Lets take a look at the charts and see what is likely to happen next...
BTCUSD Daily on Bitstamp
- Trading at 11692USD at press time after peaking out at 13880 yesterday.
- In one day we went from 11500 to 13880. A 2380USD rise in 24 hours! 20% rise!!
- Nothing can go on like this!
- Since the peak at 22:00CET, we retraced 2000USD in 1 hour!
- Right now we are at a about a 15% retracement level with a local low of 11200 which almost a 20% drop from high to low.
- Search all you like to catalysts, but the one that is most glaring is the one that was right in front of everyone all along.
- The 61.8% Fib retracement was at 13373usd. We overshot this with our torrid momentum but it was only a 500usd overshoot, and short live. We only had 3 hourly candles that opened and closed above this level.
So what does TA say about the next moves in Bitcoin?
BTCUSD Daily on Bitstamp
- I have said before in previous posts that Bitcoin has a habit of 30-40% retracements during bull markets. Assuming we are in a bull market now, we can look at the 38.2% Fib retracement as a potential support level. It also correlates with a RS line at around the 9600-9800 levels where Bitcoin found resistance back in feb 2018 (off to the left of the chart)
BTCUSD Weekly on Bitstamp
- I have also been saying that the 21WEMA is a reliable support indicator during bull markets.
- Today this lives at 7100usd and conincides with 2 other indicators, an RS line which was significant support in mid May this year.
- And also the 61.8% Fib retracement level again coming into play at 7220usd.
My take
- Patience is now required.
- Studying lower time frame charts indicates that volume spikes are on the red candles.
- We are grinding ever lower with lower lows and lower highs
5min chart
- and at the current trajectory we will reach our first RS line (9600usd) in the last days in the next 24-36h. I am not saying that this is what will happen, I am just making a trajectory statement.
- We could grind around with uncertain feedback from the market for some time, as we have seen in Bitcoin during the first months of 2019.
- So levels to watch for are 9600-9800 and then 7100-7300.
- At the first stop I would advise tolerance till we see 2 consecutive daily candles showing strong reversal at the first stop before wading back into the long side. Even at that I would set tight stops.
- If we go lower to 7100-7300, then I would again wait for a strong reversal signal and hold tight stops on any long positions.
- I have to add here that IF this is our bull markets first retracement, then we should hold 7100 at the very least. A break lower could indicate that this whole rally was a fake breakout and we are yet to find a bottom of the bear market.
- Yes seriously! We must at least give some consideration to this possibility.
- In a previous post I called the bull market on, but despite the certainty with which I declared this, it is always prudent to look over your shoulder.
As always guys, leave comments, have fun and trade safe.
Disclaimer: This post is not financial advice. Before investing any funds do your own research and make your own decisions. Cryptocurrencies are highly speculative.
And finally: Do not invest money you are not comfortable losing.
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So it looks like yesterday was a good day for someone to have sold, if they bought during the recent low levels of the last few months. I wish I was smart enough to have participated in such a trade.
I had a ask booked in at 13900 and just missed out!
Frustrating but that is how trading goes.
I am now watching carefully for the levels I talk about.
As soon as we go 4 figures, I think start to dollar cost average into the market. Off course not financial advice mind you.
Alright.