Bitcoin at an important decision point in a confused market
Hello traders!
Bitcoin has seen a significant drop yesterday with the Tether FUD articles emerging. We have now found ourselves in an interesting territory where Bitcoin has fallen to its 21 day EMA and is trying to find support. The altcoins have'nt shown the strength needed for a move upwards just yet and most of them have fallen below their 21 weekly EMA, which is one of the most important long term trendlines.
If the support at 5000$ is broken for Bitcoin, we could expect further movement to the downside with our next target at Bitcoin's 21 weekly EMA, which currently stands at around 4600$. The ongoing rally of the last few months is the first one to have reached (and went above) the mentioned average in quite some time. So far we have been rejected at the 21 weekly six times throughout this bear market. Finding support on that trendline would be crucial to resume bullish movement and perhaps increase the chance of the bear market being over.
If we, however, break that important support, we could be looking at another strong move to the downside with potential new lows in this bear market. For the bullish scenario, we would need to either find support at the level we are at currently or at the 21 weekly EMA of Bitcoin. By finding support I am not only referring to those trendlines holding, we would need to see buyers stepping in and showing interest by increasing the buy volume and consequently creating a strong bounce at the mentioned levels. If we do in fact see that happening, we would firstly aim for a double top at around 5600$ on Bitcoin and further movement to the resistance zone between 5800 and 6500$. Only by breaking those levels and holding the price above them would significantly increase the chance of the bear market being over.
When looking at the weekly Stochastic RSI, we can notice that it has been in the overbought territory for quite some time now. Although there is no certainty that overbought RSI levels mean the prices need to drop, however it is something I am keeping my eye on and is telling me long positions present a high risk setup.
Another important thing I have noticed in the charts is that we have fallen below an upwards sloping support trendline on the daily RSI which has been our support ever since the start of the rally in December (as shown in my chart).
I have 2 short term scenarios in mind.
1. Green arrow -> we find support at the 21 day EMA and continue our rally (less likely)
2. Red arrow -> the support at 5000$ is taken out and we aim for the 21 weekly EMA at around 4600$ (more likely)
Be careful as the uncertainty in the market will catch many people off guard. I wish you all a lot of success trading and if you liked the analysis, please give it a thumbs up. I will be posting these often if I see interest.
Bitcoin has seen a significant drop yesterday with the Tether FUD articles emerging. We have now found ourselves in an interesting territory where Bitcoin has fallen to its 21 day EMA and is trying to find support. The altcoins have'nt shown the strength needed for a move upwards just yet and most of them have fallen below their 21 weekly EMA, which is one of the most important long term trendlines.
If the support at 5000$ is broken for Bitcoin, we could expect further movement to the downside with our next target at Bitcoin's 21 weekly EMA, which currently stands at around 4600$. The ongoing rally of the last few months is the first one to have reached (and went above) the mentioned average in quite some time. So far we have been rejected at the 21 weekly six times throughout this bear market. Finding support on that trendline would be crucial to resume bullish movement and perhaps increase the chance of the bear market being over.
If we, however, break that important support, we could be looking at another strong move to the downside with potential new lows in this bear market. For the bullish scenario, we would need to either find support at the level we are at currently or at the 21 weekly EMA of Bitcoin. By finding support I am not only referring to those trendlines holding, we would need to see buyers stepping in and showing interest by increasing the buy volume and consequently creating a strong bounce at the mentioned levels. If we do in fact see that happening, we would firstly aim for a double top at around 5600$ on Bitcoin and further movement to the resistance zone between 5800 and 6500$. Only by breaking those levels and holding the price above them would significantly increase the chance of the bear market being over.
When looking at the weekly Stochastic RSI, we can notice that it has been in the overbought territory for quite some time now. Although there is no certainty that overbought RSI levels mean the prices need to drop, however it is something I am keeping my eye on and is telling me long positions present a high risk setup.
Another important thing I have noticed in the charts is that we have fallen below an upwards sloping support trendline on the daily RSI which has been our support ever since the start of the rally in December (as shown in my chart).
I have 2 short term scenarios in mind.
1. Green arrow -> we find support at the 21 day EMA and continue our rally (less likely)
2. Red arrow -> the support at 5000$ is taken out and we aim for the 21 weekly EMA at around 4600$ (more likely)
Be careful as the uncertainty in the market will catch many people off guard. I wish you all a lot of success trading and if you liked the analysis, please give it a thumbs up. I will be posting these often if I see interest.
Comment:
So far the 21 day EMA is holding as support (currently at 5130). This is an important level to watch. If we do see the price find support here and bounce we might see another attempt to reach 5600$. This process might take a few days however the alts need to become much stronger than they have been in the previous weeks. If 5100 is broken with volume the bullish scenario will become less likely
Comment:
Some alts have started to showing strenght and Bitcoin followed them, ETH tested a resistance around 158$ and got rejected. Bitcoin also showing a nice bounce off 21 day EMA however still no real movement.
Keep in mind it is weekend and volume is lower so moves like this do not mean much yet. Bitcoin and ETH need to break their daily highs for us to start aiming for 5300$ on BTC and 160-65$ on ETH where big resistance before the monthly high around 5600$ stands.
Keep in mind it is weekend and volume is lower so moves like this do not mean much yet. Bitcoin and ETH need to break their daily highs for us to start aiming for 5300$ on BTC and 160-65$ on ETH where big resistance before the monthly high around 5600$ stands.
Comment:
The market feels shakey guys, a larger move might come soon...not calling sides in this 1, just sticking to original posted TA. It might happen in a few hours as the new weekly candle starts.
Comment:
I believe a large move is preparing. We have held my support for 5 days in a row now, it is decision time. ETH showing some strenght, however it is still under its daily AND weekly EMA so be careful for a fakeout. I believe we might see BTC either rally to 5300 and get denied OR squeeze through, creating a bart move and reaching 5600 again, OR just fail to find buyers where we are now and we finally get the drop.