Bitcoin looks ready for a retracement followed by a gigantic move in my opinion. Over the past 72 hours we have seen incredible volatility hitting this market. From all the way down in the $4100 region spiking all the way up until $5300 and again back down to the lows of $4800. Let me break it down for you.
Quick recap
• We had our $1000 candle
• We retraced
• Created an ascending triangle
• Bullish continuation pattern
• Broke above the resistance line
• Broke out
• Broke out again
• Had our top here
• And we retraced again
Technical analysis
I am breaking this down on the 1 hour time frame as to me there is still not enough sufficient data as I would like to see on the 4 hour time frame.
We did in fact find our local top here at the $5300 mark. The volume around this mark was the most immense volume we have seen all the way since the capitulation at $6000. There were signs that we could be looking to top out at $5300. We have our wicks and bottoms of that prior consolidation around $5500 which is old support and should act as new resistance per classic TA theory. Plus the RSI was completely overextended.
After we had our retrace here from $5300, we needed to hold a level of $4975. Now that this level has been purged it’s going to be increasingly more difficult for Bitcoin to stay above these levels. Because now we not only have a confirmed resistance level between $4200-$5300 levels but also build up a new resistance zone here as well. If this gets broken and consolidated upon, it will be very strong in my opinion. It seems that we just entered this box. The question is: are we going to break through or are we going to find rejection here and go lower?
If in fact we are going lower and reach in this box right here. I believe that this run could be over and the bears could take control back.
In that case this area would also turn into a resistance area and this doesn’t look good as this whole box will be a resistance area and we then would be trading below it.
What I also noticed is that we formed a head and shoulders pattern except for the right shoulder which hasn’t formed completely. It’s just not perfect. It’s a loosely based right shoulder. The head looks good to me as there is a climax in volume compared to the other shoulders, that looks good to me. We have broken below this neckline. We are looking to see this neckline being the new resistance. And if this is the case and we cannot get above this white line here above $4975 and stay there. I am under the impression we have seen a top come in, neck line broken, head and shoulders pattern, and we may look for further movement to the downside.
This $4840 level must hold. If the $4840 level does not hold and we begin to trade back in this range down here. Where we were in our bull flag after the initial pump. This was our retracement level. I believe this whole run might be one grand pump and dump and we could see us retrace to the $4200 region. $4200-$4400 is my resistance box. And per classic TA theory old resistance should become new support.
I could see this wind up to be a head and shoulder breakdown, that we lost all areas of support that we need and we trade back below in this region down here. I would be expecting a retest down to at least $4400, that is my opinion and it would not surprise me if we didn’t test all the way down to the 0.618 Fibonacci, which right now is looming at the $4300 and maybe we get overextended to test the bottom of the box at $4200.
All would be healthy in my opinion as we would still be in a bullish trend. Let me explain how I see it. We have broken this resistance box. With lower highs month after month. And now finally we have broken though it with an unsustainable candle. How would anybody realistically expect for this candle to be sustainable. $1000 move in 10 minutes. How would you expect that to be fully sustainable?
We fail here and move into this region. It would not surprise me in the least and it would not be out of the ordinary in the least to retrace to key Fibonacci retracement levels, or old resistance becoming new support. We have our top line of resistance at $4400, we have our 0.618 Fibonacci at $4300 and then the bottom of our box at $4200, which would leave this whole region in here fair game to be a pull back zone where new support is found and a healthy uptrend can the continue. So although the price would move down roughly a $1000 we must understand that BTC is still per classic TA theory macro bullish. As it still would be consolidating at a higher high at key levels and then we continue our rise up. To me that is still bullish, looking at a daily time frame.
I would also like to take a look at the Google trends data as the Google trends data has over and over again shown the direction of the trend before it really happens. It has been historically correct that when the data starts to uptrend the following months generally is an upwards month for the asset.
We finished March with a 9. Relative to the ATH. This is relative data. Dec 2017 we were at 100, which is the highest search volume on Google trends ever for Bitcoin. We have started April here with a projection of 16.
Looking at the 7-day data we can see that before this pump took place we were at 23 and sometimes going below 20. We peaked here at 100 on April 2nd. We are now several days removed and still holding above our old levels. So there still is continues interest even though the action has settled down. If we go to the 30 days chart, we can see that the uptick in Bitcoin search volume is real. More than double. In March we were at 43 and now at 100.
*This is not investment nor trading advise. These are only my opinions and observations on the market. Always do your own research before investing or trading as this market is high risk and I am not your financial advisor. *
Quick recap
• We had our $1000 candle
• We retraced
• Created an ascending triangle
• Bullish continuation pattern
• Broke above the resistance line
• Broke out
• Broke out again
• Had our top here
• And we retraced again
Technical analysis
I am breaking this down on the 1 hour time frame as to me there is still not enough sufficient data as I would like to see on the 4 hour time frame.
We did in fact find our local top here at the $5300 mark. The volume around this mark was the most immense volume we have seen all the way since the capitulation at $6000. There were signs that we could be looking to top out at $5300. We have our wicks and bottoms of that prior consolidation around $5500 which is old support and should act as new resistance per classic TA theory. Plus the RSI was completely overextended.
After we had our retrace here from $5300, we needed to hold a level of $4975. Now that this level has been purged it’s going to be increasingly more difficult for Bitcoin to stay above these levels. Because now we not only have a confirmed resistance level between $4200-$5300 levels but also build up a new resistance zone here as well. If this gets broken and consolidated upon, it will be very strong in my opinion. It seems that we just entered this box. The question is: are we going to break through or are we going to find rejection here and go lower?
If in fact we are going lower and reach in this box right here. I believe that this run could be over and the bears could take control back.
In that case this area would also turn into a resistance area and this doesn’t look good as this whole box will be a resistance area and we then would be trading below it.
What I also noticed is that we formed a head and shoulders pattern except for the right shoulder which hasn’t formed completely. It’s just not perfect. It’s a loosely based right shoulder. The head looks good to me as there is a climax in volume compared to the other shoulders, that looks good to me. We have broken below this neckline. We are looking to see this neckline being the new resistance. And if this is the case and we cannot get above this white line here above $4975 and stay there. I am under the impression we have seen a top come in, neck line broken, head and shoulders pattern, and we may look for further movement to the downside.
This $4840 level must hold. If the $4840 level does not hold and we begin to trade back in this range down here. Where we were in our bull flag after the initial pump. This was our retracement level. I believe this whole run might be one grand pump and dump and we could see us retrace to the $4200 region. $4200-$4400 is my resistance box. And per classic TA theory old resistance should become new support.
I could see this wind up to be a head and shoulder breakdown, that we lost all areas of support that we need and we trade back below in this region down here. I would be expecting a retest down to at least $4400, that is my opinion and it would not surprise me if we didn’t test all the way down to the 0.618 Fibonacci, which right now is looming at the $4300 and maybe we get overextended to test the bottom of the box at $4200.
All would be healthy in my opinion as we would still be in a bullish trend. Let me explain how I see it. We have broken this resistance box. With lower highs month after month. And now finally we have broken though it with an unsustainable candle. How would anybody realistically expect for this candle to be sustainable. $1000 move in 10 minutes. How would you expect that to be fully sustainable?
We fail here and move into this region. It would not surprise me in the least and it would not be out of the ordinary in the least to retrace to key Fibonacci retracement levels, or old resistance becoming new support. We have our top line of resistance at $4400, we have our 0.618 Fibonacci at $4300 and then the bottom of our box at $4200, which would leave this whole region in here fair game to be a pull back zone where new support is found and a healthy uptrend can the continue. So although the price would move down roughly a $1000 we must understand that BTC is still per classic TA theory macro bullish. As it still would be consolidating at a higher high at key levels and then we continue our rise up. To me that is still bullish, looking at a daily time frame.
I would also like to take a look at the Google trends data as the Google trends data has over and over again shown the direction of the trend before it really happens. It has been historically correct that when the data starts to uptrend the following months generally is an upwards month for the asset.
We finished March with a 9. Relative to the ATH. This is relative data. Dec 2017 we were at 100, which is the highest search volume on Google trends ever for Bitcoin. We have started April here with a projection of 16.
Looking at the 7-day data we can see that before this pump took place we were at 23 and sometimes going below 20. We peaked here at 100 on April 2nd. We are now several days removed and still holding above our old levels. So there still is continues interest even though the action has settled down. If we go to the 30 days chart, we can see that the uptick in Bitcoin search volume is real. More than double. In March we were at 43 and now at 100.
*This is not investment nor trading advise. These are only my opinions and observations on the market. Always do your own research before investing or trading as this market is high risk and I am not your financial advisor. *