BITMEX:XBTUSD   Bitcoin / US Dollar Perpetual Inverse Swap Contract
BTC             is heading upwards but RSI on the 4H chart is becoming exhausted as it approaches 50 from below, which likely corresponds to top of the yellow fib channel on my chart. There is also significant resistance at 12.5, which coincides with the top of the yellow fib channel. I have highlighted the area where i think the reversal should take place. If this doesn't happen then to my mind it suggests that there is sufficient momentum to establish the 4H chart above 50 RSI and the macro level reversal from bear to bull would be confirmed.
Comment: Clarification as my original post was a little confusing:

Scenario 1: Double bottom down to approx 8500 (1D 200 EMA)
Price is heading upwards but RSI on the 4H chart is becoming exhausted as it approaches 50 from below, which likely corresponds to top of the yellow fib channel on my chart. There is also significant resistance at 12.5, which coincides with the top of the yellow fib channel. I have highlighted the area where i think the retrace from 12.5 to 8.5 should begin.

Scenario 2: If there is a sustained break above 12.5 and 4H 50RSI then to my mind the macro level reversal from the bear run down from 17k would be reversed into a bull run but i think scenario 1 is more likely, i.e. continuation of the macro level bear run until it's completion at the double bottom.
Comment: Long position closed at 12.5k so part one of my idea went to plan. Currently at 12.6 but could be running out of momentum and i've been caught out by fakeouts before so i'm going to hit the hay now and see which way gets confirmed in the morning.
Comment: Short trade active: entry price 12500
Comment: RSI on the 4H chart is showing signs of exhaustion, the last 12H candle could signal a reversal and the last 15m candle suggests a downtrend setting in. Let's see what happens.
Comment: I'm not too happy that price is heading north because I wasn't expecting it but a lot of the charts are flagging RSI bullish exhaustion and there is a possible RSI divergence forming on the all the charts up to 1H so i'm hopeful of a decent retrace soon :)

Comment: RSI on the 1H has double topped twice and the 4H seems to have doubled topped once. Both are flagging RSI exhaustion. Price is flagging. It may be that i called the top 12.5k when it might be 13. Curious to see if we head down now (my belief) or go back up.
Comment: I have to say that I got pretty concerned because i thought resistance at 13k might break but it held 2-3 tests and the downtrend seems to have set in and I suspect momentum will build further if the next 4H candle (due in 1h3m) closes below the 50 RSI level. The 13K ceiling appeared to be formed by the top of the 4H's bollinger band and the mid-channel point of the 12H's BB.
Comment: OK - the plan is proceeding nicely and i've closed some good shorts on the way down from 13k. If i didn't have to sleep occasionally i'd be doing even better! It looks to me that the makings are in place for a continuation on downward from where we are now at 10.5. My current short exit target is around 8.5, which is the 0.786 retracement fib from the climb to 20k and the 1D 200 EMA. Fingers crossed!
Comment: Yesterday evening the 10k resistance line put up a decent fight and this resulted in a retracement back up to 11k. The bears look to be in control still and are forcing price back down. I believe that the next move will be down through the resistance at 10k and onto around 8.5k, i.e. the bottom of the 0.786 fib level and the 1D 200 EMA. If there is a strong reaction off that level then i will go long in anticipation of a reversal from the bear trend that has been playing out since the 20k ATH. Summary - so far my plan is on track.
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Comment: I should have seen the reload of the 2H chart coming really - a bounce up to 11.4 isn't something i'd considered until it happened. We've had a double top with bearish exhaustion on the 1H chart's RSI and what could be a descending triangle forming on the 1H too. We should break back down below 11k relatively shortly and then with the 2H chart powering downward I hope we'll make rapid downward progress. I'm reading that 8.5k mightn't be the bottom - it may be more like 7.5k but i've not checked into that much as yet.

I should have seen the reload of the 2H chart coming really - a bounce up to 11.4 isn't something i'd considered until it happened. We've had a double top with bearish exhaustion on the 1H chart's RSI and what could be a very small descending triangle forming on the 1H too. Note that the 1H is a fairly minor chart so we need to wait until midnight UTC when the 2h, 4h, 8h, 12h and 24h candles will all close. We should break back down below 11k by midnight I hope and then with the 2H chart powering downward I hope we'll make rapid downward progress. I've read an idea that 8.5k mightn't be the bottom - it may be more like 7.5k but i've not checked into that much as yet - i'll update when i've found the idea i was reading.
Comment: So taking a longer look at the charts we've had a double bottom on the 4h and 8h - we could be going up in the short term :(
Comment: I'm reserving judgement until the 1D candle closes because the smaller candles are not being super helpful right now.
Comment: Well BTC lost about $400 in an hour and a half before midnight (UTC here in my beloved Blighty), which is circa 3.6%. The candles and charts in general continue to look bearish to my mind and that is backed by all the charts up to and including the 2D showing RSI below 50, i.e. the market is very week. A close below 10.8 and then 10.5 would open the way for a retest of 10k, which i imagine would fall on the second attempt. Potentially a descending wedge forming too...
Comment: Outlook continues to look bearish to my mind:
1) Currently challenging but losing momentum against the the 12H chart's 200 EMA. Price is sat below the line at the time of writing but the candle won't close for another 3.5 hours.
2) Currently challenging but losing momentum against the the 1D chart's 100 MA. Price is sat just above the line at the time of writing but the candle won't close for another 3.5 hours.
3) Currently challenging but losing momentum against the bear trend line limiting price since 7th January (solid thick pink trend line in the third chart)

Charts for 1), 2) and 3) below:
1)
2)
3)
Comment: Also - perhaps a small head and shoulders pattern forming?

Comment: OK so it looks like the 4H chart's 50 EMA halted upward progress and caused the mini-rally to run out steam overnight. Support at around 11.2-3 has been broken and now appears to be acting as resistance. We should break through support at around 10.8 (if memory serves) and then retest 10k. Below 10k there's not much support so we should expect late 7's to mid 8's. A failure below that level looks unlikely to my mind because the 1D's 200 MA historically has provided strong support. Assuming we bounce off around 8k then that completes the bear run down from 20k (and 17k latterly) and i expect a return to a macro level bull trend.
Trade active: Trade active:
Entry price 11300
Target exit price 7650
Stop loss 11650
Trade closed manually: Trade closed manually as my entry price was clearly too low. Trading range continues to narrow into a pennant pattern, which is likely to (finally!) resolve by breaking downward into a continuation of the bear trend. The pennant is drawn in black in this chart. A potential head and shoulders pattern may be forming.
Comment: We remain trapped in the bearish pennant but the 3/4 point of the pennant has now been reached, we appear to now be trapped below the 0.382 fib level and momentum continues to fade. I remain bearish and am expecting a downside break to occur soon.
Trade active: Well it took a heck of a lot longer than I anticipated but the trade is now progressing very well. Some resistance between 10 and 9.8 but hopefully that will fall and then we should see some fairly rapid price loss. Hopefully we'll make it down to around 7.8k but if that doesn't hold then we could be looking at around 5.5k but I'd be reasonably surprised.
Comment: Apparently a little excursion up to 10.3k was required in order to rest the bears a little but they came back strong and we closed last night below 10k. Currently trading at 9244 (XBTUSD) and I'm hoping for a little recovery up to 9.8-10k to enter a short trade down to 7.9 (short target updated as the moving average is increasing slowly).
Comment: Testing the bottom of the green fib level now. I wouldn't be surprised either with a temporary recovery up to 9.8-10k and then down again but neither would i be surprised by a breakthrough to 7.9k, i'm waiting to see.
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I should have seen the reload of the 2H chart coming really - a bounce up to 11.4 isn't something i'd considered until it happened. We've had a double top with bearish exhaustion on the 1H chart's RSI and what could be a descending triangle forming on the 1H too. We should break back down below 11k relatively shortly and then with the 2H chart powering downward I hope we'll make rapid downward progress. I'm reading that 8.5k mightn't be the bottom - it may be more like 7.5k but i've not checked into that much as yet.
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Possible second head and shoulders forming, this time a sloped one?
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RSI on the 1H has double topped twice and the 4H seems to have doubled topped once. Both are flagging RSI exhaustion. Price is flagging. It may be that i called the top 12.5k when it might be 13. Curious to see if we head down now (my belief) or go back up.
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Just seen your post @julesistrading - suggest caution; possible RSI downtrend forming on the 15m chart. Highs look to be getting lower. RSI is showing exhaustion on the 30m and 1h charts too. Could well go up but i'm wary that this is a fakeout above 12.5.
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RSI on the 4H chart is showing signs of exhaustion, the last 12H candle could signal a reversal and the last 15m candle suggests a downtrend setting in. Let's see what happens.
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Great post if u can keep Comment woud be nice..
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@c0d3r4, thx very much! I'll keep updating :)
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@angel_lobs I'm suspicious that this might be a fakeout and we could still be constrained by the 4H chart if it returns to <50 RSI
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angel_lobs tigerpause
@tigerpause, Well you got a point, but if you see the chart at a higher TF and start doing Elliot Waves this ABC that we have at the moment respects the rules
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