Good day Traders
Bitcoin is retracing after a few days of battling that DMA50, whilst watching a new episode of paint drying, and no volume follow-through. We're now on the verge of a temporary bearish crossover between EMA15 and EMA200. See the 2 screenshots below of the S&P and DJI which shows the last time we had a downward cross of EMA15 and EMA200 in those markets on the weekly. This actually preceded the 2008 financial crises and doesn't happen very often, so not something to take lightly on the weekly. In fact bitcoin has never had this crossover before, since there's simply not enough history for EMA200 on the weekly chart for us to compare this bearish crossover to.
Price is still well below the Ichimoku cloud, its base line, conversion line, and our EMA200 which we unsuccesfully retested in December and again in January, so we're still very much in a down trend. Span A (orange) is still moving down and away from Span B (pink) on the daily chart, signalling a potential temporary acceleration of the the down trend once we have a bearish crossover of EMA15 and EMA200 on the weekly.
I say temporary crossover because when it happens, I suspect bitcoin will drop through our WMA200 support to new lows just below our $3k support, and back to the trend line support connecting our 5 Feb 2018 swing low to our December 2018 lows, but we should then have a dead cat bounce with EMA15 crossing back above EMA200, for a rally towards the cloud baseline to around $4900 - $5100, before crossing over to the downside again when we can't get above the base line resistance, resuming the downtrend from there with a move back below WMA200, EMA200 and our EMA15 support.
We had a 38.2 fib retracement with this recent long squeeze, so i'm expecting a 161.8 fib extension target of $2757 sometime at the start of March 2019, where there should be an abundance of liquidity from all the stops just below $3k. The herd will believe that the bottom is in and we'll have a bull trap rally to the cloud base line and DMA200 resistance, before resuming the downtrend past our $3k support finding support somewhere around $2k, and bouncing back to our $3k resistance.
We should then drop from $3k for the capitulation leg of this market cycle, sometime in December 2019, with a crash down below our downtrend support line, finally bottoming and finding support at the initial uptrend support of the 2015 bull cycle, somewhere between $1000 - $1350.
Bitcoin should then move back above the downtrend support, slowly moving back to our $3k resistance around July 2020 shortly after the halving (halving is expected around May 2020 so expecting a gradual rise once we've bottomed, and as we approach that date).
We should have range-bound consolidation after capitulation, between April 2020 and March 2021, where I suspect we'll consolidate between $2k and $3k before starting a new bull cycle and a break to the upside above our $3k resistance sometime around March 2021 and onwards to a new ATH for bitcoin around August 2022.
Good luck and happy trading!
Dow Jones: Bearish crossover of EMA15 and EMA200
S&P500: Bearish crossover of EMA15 and EMA200
Previous chart:
Bitcoin is retracing after a few days of battling that DMA50, whilst watching a new episode of paint drying, and no volume follow-through. We're now on the verge of a temporary bearish crossover between EMA15 and EMA200. See the 2 screenshots below of the S&P and DJI which shows the last time we had a downward cross of EMA15 and EMA200 in those markets on the weekly. This actually preceded the 2008 financial crises and doesn't happen very often, so not something to take lightly on the weekly. In fact bitcoin has never had this crossover before, since there's simply not enough history for EMA200 on the weekly chart for us to compare this bearish crossover to.
Price is still well below the Ichimoku cloud, its base line, conversion line, and our EMA200 which we unsuccesfully retested in December and again in January, so we're still very much in a down trend. Span A (orange) is still moving down and away from Span B (pink) on the daily chart, signalling a potential temporary acceleration of the the down trend once we have a bearish crossover of EMA15 and EMA200 on the weekly.
I say temporary crossover because when it happens, I suspect bitcoin will drop through our WMA200 support to new lows just below our $3k support, and back to the trend line support connecting our 5 Feb 2018 swing low to our December 2018 lows, but we should then have a dead cat bounce with EMA15 crossing back above EMA200, for a rally towards the cloud baseline to around $4900 - $5100, before crossing over to the downside again when we can't get above the base line resistance, resuming the downtrend from there with a move back below WMA200, EMA200 and our EMA15 support.
We had a 38.2 fib retracement with this recent long squeeze, so i'm expecting a 161.8 fib extension target of $2757 sometime at the start of March 2019, where there should be an abundance of liquidity from all the stops just below $3k. The herd will believe that the bottom is in and we'll have a bull trap rally to the cloud base line and DMA200 resistance, before resuming the downtrend past our $3k support finding support somewhere around $2k, and bouncing back to our $3k resistance.
We should then drop from $3k for the capitulation leg of this market cycle, sometime in December 2019, with a crash down below our downtrend support line, finally bottoming and finding support at the initial uptrend support of the 2015 bull cycle, somewhere between $1000 - $1350.
Bitcoin should then move back above the downtrend support, slowly moving back to our $3k resistance around July 2020 shortly after the halving (halving is expected around May 2020 so expecting a gradual rise once we've bottomed, and as we approach that date).
We should have range-bound consolidation after capitulation, between April 2020 and March 2021, where I suspect we'll consolidate between $2k and $3k before starting a new bull cycle and a break to the upside above our $3k resistance sometime around March 2021 and onwards to a new ATH for bitcoin around August 2022.
Good luck and happy trading!
Dow Jones: Bearish crossover of EMA15 and EMA200
S&P500: Bearish crossover of EMA15 and EMA200
Previous chart:
Comment:
This is our bitfinex shorts, just showing how close we are to that important +-19k support. Every time price has dropped to that support or risen to that resistance, bitcoin has experienced a corresponding short squeeze and a large move to the downside. Keep an eye on that level because shorts are dropping off fast.
Comment:
Comment:
For anyone who doesn't believe we can capitulate to $1k, this was the Nasdaq during the dotcom bubble which followed the same hyperwave pattern:
