You're probably quite frustrated watching Bitcoin at the market shuffling sideways like a crab. Clearly we are at a crucial moment for Bitcoin and the question on everyone's lips is, will we break higher or lower?
To me, the market is looking quite weak. Our recent sideways-up move has been lackluster and not at all what I would call bullish.
Yes, we've had a series of higher lows, but not particular impressive ones.
We've also had a double-top.
Every time price hits 6800 its sent away again.
Below I share with you my analysis as to why I think Bitcoin looks ready to drop lower. And there are a lot of reasons, so grab yourself a cuppa and enjoy...
1. Trendline resistance
There are two downward trend lines in play (I use the Log chart).
The BLUE trendline is significant and stretches all the way back to the peak in January. Price is pressed right up against this line at the moment. Kinda reminds me of my days squashed against the doors on the London Underground. I do think there is some possibility that this line might be ready to break, however if that happens, price will be running straight in to some very heavy resistance, including a second, pink trendline which has now formed.
The second PINK trendline sits conveniently at the edge of a ton of resistance and seems unlikely to get broken in these market conditions. I think we'll probably break the blue trend, but then get rejected at the pink, effectively making a false break of the blue.
2. Resistance at 6800
6800 - 7000 area has been a pivital level since Feb 2018. It has acted at support or resistance at least 6 times this year. Each time we've touched 6800 over the past 2 weeks, price has retreaded and comes back with less force each time.
3. Fibonacci resistance
Every attempt to break the down trend this year has met with rejection at the Fibonacci 61.8 or Fib 50 levels. So far 5 times this year, and we are yet to successfully breach the 50% level of the September down move. Actually the Fib 50% level is also roughly the 6800, so that's TWO string resistances to break - in a very weak volume market. Hmmm...
4. Multiple Moving Average Resistance
So, if BTC can....
Break the trend
Break 6800
Break Fib 61.8
...then we will still run in to the Daily 100EMA (BLUE), Weekly 20 EMA(RED), Weekly 50 EMA (GREY) and Daily 200 EMAs (ORANGE)
All with bugger all volume.
Hmmmm.....
5. Current move looks corrective
If you compare the candles from the current 2 week, you'll notice that they're pretty pathetic compared to the big strong Impulsive (strong) moves down that have characterized this downtrend. This move looks just like a normal correction.
6. We could be in a descending channel, not a wedge
Look again at this chart. The pink lines show a wedge pattern could be in play. If support at 6000 breaks, we'll drop to the lower channel support at around 4800.
7. Multi Year Trend
So I think that price will drop until we return to the yearly upwards trend line.
Now, depending on how you draw your trend lines, there could be one of several possibilities. I personally prefer to use area with most touches. A trendline that gets respected more often suggests to me that more traders are using it, and therefore, its probably more reliable. However these can change from trader to trader, and from exchange to exchange.
Phew!, that was a biggie! The tips of my fingers are burning. I hope that this analysis has given you some food for thought. Let me know what you think or where you think that my analysis may be floored. I'd love to get your feedback.
And please if you have found this useful, show me some love by clicking Like and Follow :-)
Trade safe!
To me, the market is looking quite weak. Our recent sideways-up move has been lackluster and not at all what I would call bullish.
Yes, we've had a series of higher lows, but not particular impressive ones.
We've also had a double-top.
Every time price hits 6800 its sent away again.
Below I share with you my analysis as to why I think Bitcoin looks ready to drop lower. And there are a lot of reasons, so grab yourself a cuppa and enjoy...
1. Trendline resistance
There are two downward trend lines in play (I use the Log chart).
The BLUE trendline is significant and stretches all the way back to the peak in January. Price is pressed right up against this line at the moment. Kinda reminds me of my days squashed against the doors on the London Underground. I do think there is some possibility that this line might be ready to break, however if that happens, price will be running straight in to some very heavy resistance, including a second, pink trendline which has now formed.
The second PINK trendline sits conveniently at the edge of a ton of resistance and seems unlikely to get broken in these market conditions. I think we'll probably break the blue trend, but then get rejected at the pink, effectively making a false break of the blue.
2. Resistance at 6800
6800 - 7000 area has been a pivital level since Feb 2018. It has acted at support or resistance at least 6 times this year. Each time we've touched 6800 over the past 2 weeks, price has retreaded and comes back with less force each time.
3. Fibonacci resistance
Every attempt to break the down trend this year has met with rejection at the Fibonacci 61.8 or Fib 50 levels. So far 5 times this year, and we are yet to successfully breach the 50% level of the September down move. Actually the Fib 50% level is also roughly the 6800, so that's TWO string resistances to break - in a very weak volume market. Hmmm...
4. Multiple Moving Average Resistance
So, if BTC can....
Break the trend
Break 6800
Break Fib 61.8
...then we will still run in to the Daily 100EMA (BLUE), Weekly 20 EMA(RED), Weekly 50 EMA (GREY) and Daily 200 EMAs (ORANGE)
All with bugger all volume.
Hmmmm.....
5. Current move looks corrective
If you compare the candles from the current 2 week, you'll notice that they're pretty pathetic compared to the big strong Impulsive (strong) moves down that have characterized this downtrend. This move looks just like a normal correction.
6. We could be in a descending channel, not a wedge
Look again at this chart. The pink lines show a wedge pattern could be in play. If support at 6000 breaks, we'll drop to the lower channel support at around 4800.
7. Multi Year Trend
So I think that price will drop until we return to the yearly upwards trend line.
Now, depending on how you draw your trend lines, there could be one of several possibilities. I personally prefer to use area with most touches. A trendline that gets respected more often suggests to me that more traders are using it, and therefore, its probably more reliable. However these can change from trader to trader, and from exchange to exchange.
Phew!, that was a biggie! The tips of my fingers are burning. I hope that this analysis has given you some food for thought. Let me know what you think or where you think that my analysis may be floored. I'd love to get your feedback.
And please if you have found this useful, show me some love by clicking Like and Follow :-)
Trade safe!
Comment:
Another possibility which I consider less likely, is that the trendline could hold and price could gradually rise up and retest 6800, but then would fall hard from the second pink trendline. Whatever way you look at it, I think bitcoin will test 5800 soon.
I expect price will continue to fall to 5800.