How deep are we going? I think deeper than many expect...
I have now been thinking since the 12th that a retest of that Marabozu was needed before we could move higher. I did not expect to go as high, and I am highly suspicious of the neck-breaking pace of sentiment change in the space. Too many loudly bullish peeps out there for my liking, and this is an indicator as good as any other so I keep thinking this could turn into a lower low if the bears have it, and judging by the low volumes there are a lot of people waiting or hodling. I noticed today that the daily RSI has once more dropped below 60 which was a level we had failed to pierce since the 20th of Dec until this latest rise. This might signal a continuation of the downtrend.
The red area is the potential neckline of a H&S that would provide some symmetry and the outcome of that could result in either a retrace to the 0.5 fib of the recent leg up from the lows or a bounce back above $10k.
However, if we break down below that with force, we could continue to the pink box which would go some way to retracing that Marabuzo clearing the 0.236 fib and touching the long-term trendline in place since Jul 2017 on a linear scale. This would provide us with a stronger platform to punch through the $10k barrier. I am acutely aware of the parallels with the past and this scenario would provide an amazing launching pad to repea the 2013/14 pattern so we can head for higher highs before retracing all the way to the bottom trend line again.
The bearish case here is that we are retracing to the low trendline before we can reach ATHs again which is potentially $4,500.
The red area is the potential neckline of a H&S that would provide some symmetry and the outcome of that could result in either a retrace to the 0.5 fib of the recent leg up from the lows or a bounce back above $10k.
However, if we break down below that with force, we could continue to the pink box which would go some way to retracing that Marabuzo clearing the 0.236 fib and touching the long-term trendline in place since Jul 2017 on a linear scale. This would provide us with a stronger platform to punch through the $10k barrier. I am acutely aware of the parallels with the past and this scenario would provide an amazing launching pad to repea the 2013/14 pattern so we can head for higher highs before retracing all the way to the bottom trend line again.
The bearish case here is that we are retracing to the low trendline before we can reach ATHs again which is potentially $4,500.
Comment:
So first target reached, now I would expect it either rises to 7600 to form a head and shoulders or if it surpases the 0.38 fib with strength it might head for the 0.5 fib of 6850 before having another rally...
Comment:
To add further the RSI is oversold on the 4h and 1hr charts so a rally here would be no surprise.
Comment:
We have now been consolidating for a couple of days, the pattern emerging could be considered a isometric triangle or a diamond, either way it does not provide clues as to the direction of the breakdown.
Option 1 - it breaks to the upside, a measured move would land us around the aforementioned 0.23 fib and 7600.
Option B - it breaks to the downside, a measured move would land us around the .618 and 6500 or below to the .786. At that point we begin to get close to long term trendline which started on July 2016.
Oscillators also offer a mixed picture;
-1hr - we are mid range RSI after having oversold, the MACD MAs are continuing to rise and almost reaching mid point, and the 50, 100 and 200 MAs are all above = bullish.
- 4 hr - RSI is just above the oversold line, MACD is crossing to the upside and MAs are above, however the 200 is just above us providing some resistance = bullish but not so much.
- 1D - yesterday resolved as what could be considered a doji after a downtrend, RSI is at midpoint after being oversold but it is below the 60 point that provided resistance throughout this bear trend, MACD MAs have crossed and heading down, 200 MA is far above us & 100 MA is providing resistance and 50 is providing support = neutral to bearish.
Conclusion = in the short term indicators point to a rally but in the midterm to we continue to look bearish. We'll see the effect Consensus has but a touch of that trendline prior to new highs might give the market more confidence to reach the 9500 level of the Feb/March double top.
Option 1 - it breaks to the upside, a measured move would land us around the aforementioned 0.23 fib and 7600.
Option B - it breaks to the downside, a measured move would land us around the .618 and 6500 or below to the .786. At that point we begin to get close to long term trendline which started on July 2016.
Oscillators also offer a mixed picture;
-1hr - we are mid range RSI after having oversold, the MACD MAs are continuing to rise and almost reaching mid point, and the 50, 100 and 200 MAs are all above = bullish.
- 4 hr - RSI is just above the oversold line, MACD is crossing to the upside and MAs are above, however the 200 is just above us providing some resistance = bullish but not so much.
- 1D - yesterday resolved as what could be considered a doji after a downtrend, RSI is at midpoint after being oversold but it is below the 60 point that provided resistance throughout this bear trend, MACD MAs have crossed and heading down, 200 MA is far above us & 100 MA is providing resistance and 50 is providing support = neutral to bearish.
Conclusion = in the short term indicators point to a rally but in the midterm to we continue to look bearish. We'll see the effect Consensus has but a touch of that trendline prior to new highs might give the market more confidence to reach the 9500 level of the Feb/March double top.
Comment:
Pff, well I am pleased for once my midterm projection might be coming to pass... It has helped immensely to trade the swings while having a clear idea of a lower low.
Currently RSI oversold on 30min, 1hr, 4 hr and almost there on the daily so 2 options;
- It continues to the red box to retest that Marabozu I have been banging on about since the 12th of Apr causing the daily RSI to be oversold as well.
- It takes a pause to retest the 0.5 fib resistance or 6850 price level...
Will keep watching but I am really hoping for a touch of that long-term trend line and clarification as to whether we are going to aim for the $10k resistance again or finally head to the much branded about $4k bottom so we can just get out of this bear trend... I have had about enough now
Currently RSI oversold on 30min, 1hr, 4 hr and almost there on the daily so 2 options;
- It continues to the red box to retest that Marabozu I have been banging on about since the 12th of Apr causing the daily RSI to be oversold as well.
- It takes a pause to retest the 0.5 fib resistance or 6850 price level...
Will keep watching but I am really hoping for a touch of that long-term trend line and clarification as to whether we are going to aim for the $10k resistance again or finally head to the much branded about $4k bottom so we can just get out of this bear trend... I have had about enough now
Trade closed: target reached:
The time of truth is here! About to reach long term trendline on the linear scale. RSI about to hit oversold on the daily but the bulls are not showing up just yet. Volumes remain pityful and capitulation may ensue...
Though it is worth noting that this has already happened in the BTCUSD pair....
Not looking too hopeful at the moment and below that is only the red box where the support is... That would lead us to severly oversold if it happens quickly which would set us up better for a bounce.
Though it is worth noting that this has already happened in the BTCUSD pair....
Not looking too hopeful at the moment and below that is only the red box where the support is... That would lead us to severly oversold if it happens quickly which would set us up better for a bounce.