After 50D-SMA Breakout: Approaching the Boss Battle Zone

Hey guys,

This is the follow-up post to my previous one, in which I explained the whole squeeze and breakout scenario.

The zone we are now approaching can be seen as extreme resistance. Resistance factors are (descending in significance):
1. 200W-EMA
2. 0.5 - 0.618 Fib resistance zone (Trend-based Fib Extension from the Christmas Eve high)
3. 50D-EMA (orange line in the chart above)
4. 0.768 Fib resistance level (from the high at 4409 - Nov. 29)
5. Previous high at 4241 (Christmas Eve)

This zone ranges from 4124-4256. Apart from a violent breakout with way above average volume, I can't see BTC penetrating this zone in one go, but we will see. I think it is pretty safe to say that BTC will at least try to bust through, and it will most probably happen soon, because there is not much of a reason to stay in the current zone and momentum indicators are firing long mostly. Volume is still rather low, which makes me question the conviction behind this move, though.

A pullback to the yearly trendline is also a possible scenario, but only after a rejection from the 'battle zone'. Personally, I have a nice long position since 3660 and don't intend to take profits until we reach 4120.

Updates coming. Trade safe.

Comment:

An additional resistance factor is the diagonal trendline coming down from the previous highs. I wouldn't bet on this one being strong resistance, but it definitely adds to the overall difficulty.

The next question is whether BTC will dive to approx. 3942-3920 to fill the VWAP gap or not.

Comment:

Interestingly, the gap fill came, but rather late. It's not yet fully filled, so we could test lower. Our major support level is the .618 fib at approximately 3920. I still expect BTC to continue upwards and at least test the huge resistance zone.

Comment:

BTC just reclaimed an important fib level and is trying to break through the bottom local trendline where it fell through earlier. Commendable bull power here. Could easily result in a strong move upwards.

Comment:

There's a first small push to 4089. Up until now, everything is playing out as expected. We should see further upside pressure, and the real fight will begin above 4100.

Comment:

The past 15 hours have shown that BTC has steady support, but we severely lack aggressive upside volume. From what I see, BTC could attempt to break 4100 soon and enter the battle zone, but it all depends on whales pushing the market above the key levels.

I've taken precautions and took 1/5th profit from my long.

Comment:

Battle zone reached, the fight is on. Let's see how this turns out, I took over 60% profit now. Next profit targets are between 4200-4250.

Tbh I don't know if BTC is strong enough to break this zone, so let's wait and observe what happens. Maybe the whales decide to get themselves involved for a change.

Comment:

Well, BTC got a punch from our boss. See if it recovers.

Comment:

Wow it only grazed the battle zone once and a holy grail war is breaking loose.

I got stopped out on my refilled longs with that huge wick. I'm going to observe for now, this is madness.

Comment:

BTC has stabilized at 4k once again. I did a comprehensive analysis of all mid-term level fib lines and have noticed that there is extreme support between 3970-4000 as well as between 3880-3930. That is a factor that pushes BTC upwards despite heavy selling pressure.

The path of least resistance, judging solely from the fib lines, is upwards. But it's extremely difficult to say how this will play out.