Bitcoin (BTC) And The Escape From Many Triangles

Actualizado

Alright, for once I'm going to post a short analysis. Just wanted to post a chart with these crazy lines I've been looking at. As I've been saying in my updates, I've been seeing some warning signs that we could be in for another leg down soon. Looking at this chart, you can see we have a GIANT diagonal resistance from the ATH peak to very near the current price. I think it has validity, based on how price has behaved every time it's touched it (we are now close to our 4th near touch). I'm using the Bitfinex chart here because even that crazy Tether fiasco pumped it EXACTLY to that line. If we somehow manage to get above it soon, we still have the other triangle resistances to contend with.

This is not really a trade setup, although it does show an immediate target of 2K, or another 50% decline in price from here if we don't break out soon. I function better as an analyst, rather than a trader myself. I can analyze more objectively that way, even when I do provide trade setups. In any case, this is just to post some lines, and to see how price reacts to them in the future. The fact that the big line from the ATH has served as a selling point, makes it seem to me that the selling is controlled by computers. These computers may have calculated that the target price is close to zero, which means they will keep selling at that exact point. Obviously, this sounds a little crazy, I know. But this would explain why even human bullishness hasn't been able to save the market so far. If someone programs a computer to make the most amount of money possible, it could conceivably get stuck in this sort of loop. Sounds like SciFi. It's probably the fiction writer in me coming out.

In any case, a 4th failure at that line would be a very bad sign. Of course, breaking out of that crazy resistance here above 3K would be a very good sign for the market! However, ETH has already failed at a major resistance that it hadn't touched since JULY! That's nuts. This analysis was longer than I originally intended. Woops.

Definitely not financial advice. This is what i'm seeing in the charts, and I'm just putting it here for reference, or if anyone else finds it useful for some reason.
Good night & good luck!

-Victor Cobra

Nota

Breaking out of a similar line on the Coinbase chart! Let's see what happens if we get there on Bitfinex.

Nota

Regardless of my critics on this matter, it does seem these lines have validity. On Coinbase, we are just now PERFECTLY testing it as support. I guess the validity is still arguable, since it can be also true that this is just short term resistance. Either way, it shows how important lines are as psychological (and digital) barriers.

Nota

Just broke below it. If we don't get back above soon, we could see a big selloff.

Nota

Buyers still showing strength here. We ideally need a candle close above the line to keep the pressure on the bears.

Nota

Quite the fight going on here.

Nota

The fact that we've held this line is good, but we keep gravitating back towards it with zero upwards momentum. It's taking a very long time for the market to make its next big move. Some alts are beginning to lose momentum as well.

Nota

It's interesting to note that alts actually haven't been seeming that bearish recently. They've shown much more strength than Bitcoin, overall, in terms of sustained upwards pressure. As we know though, billions of dollars can be wiped out of the market in seconds, and all the alt gains can evaporate quickly. People are buying alts convinced that the bottom is in, but if Bitcoin stagnates for too long, we might have a loss of confidence. In any case, I'm excited to see which way this breaks.

Nota

If we drop now, or any time in the next few days, this line will be confirmed as resistance, which will be a really bad for the market. We really need to see buyers stepping in ASAP. Otherwise, we won't even move up to test 5K like many are expecting/hoping for.

Nota

If we drop here, a capitulation wick could, in theory, take us well below 2K before bouncing back above it. This is just a bearish possibility. Can't rule it out, given the market structure. My hope is that we've already found bottom, but I'm not so sure. It'll be interesting to look back in a few months to see how my own psychology related to how the market ended up behaving. When we were stuck just above 6K, I was convinced we wouldn't be able to sustain below it if it broke down. So perhaps I'm wrong again and we'll break out.

Nota

This is what a big capitulation event would look like, if it played out. Obviously doesn't have to, and I'm only speculating.

Nota

This capitulation event would actually still align with my timeframe for the earliest end of the bear market, which has been late January/early February, 2019.

Nota

XRP has bounced at its support line that it has held since October. XRP has been a leading indicator the last several months. This means chances are increasing that the market will continue up, and that includes Bitcoin.

Nota

Well, looks like my instincts were originally correct that a big selloff was brewing. This is actually REALLY bad for the market, as it means that this line is confirmed as major resistance. This is bad, because the line essentially heads down into a bottomless pit. We absolutely need to see some big buying occur now. We shouldn't panic too much yet, since we've already bounced off previous support. Below here, we have 3760 and 3700 as support (Bitfinex chart).

Nota

We've made another leg down to the final support area as major alts are dropping hard. If this breaks, we will likely see a capitulation event play out (like I outlined above). So far we haven't seen any buying. This means we can have a wick that takes us deep into the 1K area, before rebounding and getting back above 4K by the end of February. This again would coincide with my speculative timeframe for the earliest possible end to the bear market. From there, we would likely drift sideways in the 3-4K area.

Nota

Going to take a break from the market. I'm not a trader (definitely more of an analyst), so trading this right now would be too stressful. If I were to short, I'd short the breakdown of 3.7K (here) with a stop loss above 3.9K, or something like that. Instead, I'm just going to hold. The way I see it, either we will have a capitulation low and just rally back up to current levels, or we will never recover. No use stressing over it. However, people who are waiting to catch the lows should definitely wait for a confirmed bounce.

Nota

One could also go long here, with a tight stop loss. Longs have dropped a bit now, and if they still want to control the market, they can begin a rally here. This is their last chance though.

Nota

We've held this area for now, but the low volume slight price increase is a little concerning. It actually can mean one of two things:
1) Bears were unable to follow through, and as such trading volume has decreased
2) Bulls lack conviction to bounce at this level.
Given price action, and the fact that a bunch of alts are still holding supports, tells me that we may not actually have the capitulation low I've been speculating about. Another reason to think this would be the fact that the daily RSI already reached a capitulation zone in November. That RSI action often indicates a bottom. This means that we have another possibility - a double bottom reversal. This could then provide enough fuel to take us to the 5K area that many bulls were aiming for. I guess we'll see if this plays out. Bear volume isn't increasing, but neither is bull volume. The trend is with the bears until it's not. This potential double bottom would mean we may have to briefly test the 3450 support zone. We would have to have a good rejection candle there.

Nota

We just had a stop hunt that took us fairly low on some exchanges (into the 3400's on Binance). This could have just been a big market sell by someone who wanted to get out. Or, it could be the spring necessary to propel us up again to test the 4K resistance. The selling was absorbed, so there is still buying interest. However, bulls REALLY need to take this opportunity to the push the price up. So far, we haven't seen a significant response. If we do end see a morning star pattern forming over the next day, this will end up looking like a sloppy inverse head and shoulders. Unfortunately, we are now entering the weekend. I don't like it when bulls are presented an excellent opportunity on weekends, because it often means no follow through.

Nota

And this is what I mean...we're seeing a small push up now, but on decreasing volume. We're still in the range. We'd need to see some big buys coming in to increase the volume into the weekend, or we risk more sideways/bearish action.

Nota

Interestingly, we keep seeing some accumulation/absorption in this area. This has caused us to form a second doji candle, which could end up turning this into a "morning star" pattern, which is bullish. It's possible we don't even see a lower low. The low volume could very well indicate that bears tried to break us down at an obvious resistance but failed. Bears know that once the low 4K area is broken, bullish volume will rapidly increase. On the way down, we sliced pretty much straight through the high 4K area on high volume.

Nota

So we've broken down from this small bear flag, but haven't seen much volume step in yet. I don't think we'll see much volume until a lower low or higher high is made. I think the reason for this is basically everyone is waiting to see if we have "really" seen bottom. However, because of this, RSI is starting to look like it's about to print an enormous bullish divergence on the daily, especially if we do happen to make a lower low. This is something bears should be weary of. We can see bears being hesitant to even enter short positions here, and longs remain at a relative high. These are bullish divergences in the market that shouldn't be ignored. There is a LOT of support between here and 2.8Kish. It will take a lot to break through. We could still see that big capitulation low I've been talking about, but bears do have reasons to be cautious here. We're seeing this reflected in the margin positions. As I've mentioned, I am not currently day trading or even setting stop losses on my positions, because I feel like the long term upside is beginning to far outweigh the downside. This is my bias. I'm risking only what I'm willing to lose.

Nota

Price action as been very interesting the last day. We had a selloff yesterday on low volume, and since then we were able to bounce back to the broken support, confirming it as resistance. However, volume continues to build as bulls don't seem to have given up. Things are actually looking slightly more bullish to me than they did when we were above 4K the other day. This is starting to look more and more like accumulation (especially with alts). Some alts have broken supports and likely stopped people out, but they've rallied back above supports and are painting bullish patterns (take NEO as an example).

Nota

Here on the coinbase chart, it's looking like we might actually have the reversal I was speculating about yesterday, especially if we get a bullish engulfing candle on the daily.

Nota

Oof that was fast.

Nota

We need to close this candle ideally above 3636 (on Coinbase) in order confirm a move higher. Volume has already died down since the green candle, which isn't good. It's just clear that there is such little interest in the market at the moment. Once we get a major move though, especially beyond that light blue resistance, volume should come pouring in.

Nota

Here's my log trend justification for what a potential best case scenario could look like. This would involve a break back above 6K, all the way into the 7K area to test the orange trendline as resistance, and in the process, we would then form a new log uptrend (in red).

Nota

Just posted a new analysis with a long trade setup. The short is a little more obvious, so I decided to just post a long setup.

Buying Into Fear - Bitcoin (BTC) Long Setup

Nota

So we're taking more time in this zone, which is concerning for bulls. Pretty much we either see a capitulation event or break out of this resistance. There's not much more time we can go sideways here.

Nota

This is the breaking point. We need to break out now to avoid another leg down. Got rejected pretty hard again today.

Nota

On the Bitfinex chart, by the way, we're still a little more than $200 away from resistance. On the Coinbase chart, we're much closer. In fact, we're touching it right now. This would indicate that we might have a fakeout. However, there have been tons of fake moves in both directions (for alts as well).

Nota

We're gaining volume right under resistance, which is much better than losing volume in this spot. Perhaps the bulls will be enticed.

Nota

We're now ABOVE the resistance on Coinbase, and forming an ascending triangle with more buy volume than sell volume (this fits the general profile of an ascending triangle, as it shows buy pressure increasing)

Nota

So we've slid out of the ascending triangle and have constantly failed in this area. Volume is dropping as well, indicating lack of interest. Longs being where they are, we could see another long squeeze here and a capitulation low (as I originally outlined in this chart). Taking a break for now. Will update sometime next week or in early February to reassess the market.

Nota

Well, I need to give an update now since we got rejected at the Bitfinex resistance (on this chart). If we fail to push up here, we will likely have a pretty large selloff. However, buying pressure hasn't let up yet, even though we're on weak volume. Interesting signals. I'd probably wait for a confirmed break of that line (around 3900) to go long.

Nota

This is why I said it would be best to wait for a confirmed break of the line to buy. Unfortunately, this collective psychology means everyone is waiting for someone else to do the heavy lifting for them. Meanwhile, the sellers will keep selling. If we don't have a push up soon, we'll likely slide down to the 3200 zone. If we break the 200W MA, we could then be in for that capitulation low.

Nota

Each mini push up just keeps getting weaker and weaker. Really reminds me of what happened at 6K.

Nota

We bounced off the broken downtrend line on the coinbase chart with that recent stop hunt, but we're still failing at resistance on Bitfinex. Nothing looks super bullish about Bitcoin at the moment, so I have a feeling we're going to see a big drop soon. That's just my gut. But there's a chance we HAVE already bottomed, and I'm just being skeptical and cautious. The movements of alts have been confusing. XRP and XLM, which have been market leaders in the past have completely flatlined. XLM looks particularly worrying. It's always interesting to watch where the money flows in the market. A lot of the "pump" money has gone into TRX recently and left other coins alone. TRX's top coincided with Bitcoin's breakdown from 4K. Conflicting signs. I guess we'll see what happens when the market decides to make its next big move.

Nota

Just to clarify: There are strong signs indicating either a breakdown or a breakout here. Either case would not look surprising from a technical standpoint. Since we're in a bear market, a breakdown is more likely, but it would be really interesting to see what would happen during a large upswing (how many people would stop calling for sub and how many people would start calling for 50K by Christmas).

Nota

Very close now! Let's see if this causes a big drop. If not, then it's a good sign!

Nota

What I really don’t like is when we test major resistance on low volume. If someone decides to buy a lot here though...we could see a big breakout. The fact that we’re entering the weekend at this price level isn’t good. In fact, this has continuously happened throughout the bear market. Perhaps this time will be different....it needs to be in order to increase the likelihood that we’ve seen bottom.

Nota

So we broke out and are probably about to test it as support, just as we did with the Coinbase resistance line. However, I expected a bigger breakout, so unfortunately this doesn't look very good for the bulls. If we fail on a potential retest, it'll be pretty bad for the market, and we may need to have a capitulation event.

Nota

Test successful

Nota

And the market holds its https://breath....https://www.tradingview.com/x/VtmIziEm/

Nota

More interesting triangles.

VictorCobra

También en:

Publicaciones relacionadas

Exención de responsabilidad

La información y las publicaciones que ofrecemos, no implican ni constituyen un asesoramiento financiero, ni de inversión, trading o cualquier otro tipo de consejo o recomendación emitida o respaldada por TradingView. Puede obtener información adicional en las Condiciones de uso.