Hey there cryptofriends!
I know we are all shocked about what happened this week, I guess almost nobody expected we would see dumps as big as this... is it the corona virus affecting the markets? Probably it is. Are people panicing? For sure. Is that normal? It is. Did BTC make an unexpected move? Probably it did. Would we have been able to predict it? I'm really starting to think we could. But that's easy talking after it happened. If you didn't check out my analysis from earlier this week, go check it here:
I know it didn't play out how I expected. Anyways, there are some important things I want to share with you to show you all that it is not that bad, and maybe we could have all expected this move to happen..
I always like to start my analysis from the higher timeframe and work my way down to smaller timeframes. That's exactly what we are going to do here.. let's start with the Monthly!
If we look at the Monthly chart we can clearly see BTC is still moving within a big triangle, starting with a long-term support line from March 2017 and a long-term resistance line from December 2018. We can see price wicked down the support line for the first time in 3 years. Even though we went below, we also bounced back quickly. If we close this monthly candle above that trendline we are still good to go and moving perfectly within the triangle. The question that can rise is; why did we wick down and why exactly there? We’ll get there in the Weekly chart.
As we see on the Weekly chart, we are also perfectly moving in between the triangle. Here is where we are going to look to our previous leg and are going to use Fibonacci. Previous leg was the leg from the week of 16 Dec ’19 – 10 Feb ’20. If we use that we can see that we hit 161.80 EXACTLY. Let’s move forward to the Daily chart since we will need some more details.
The Daily chart is where things are starting to get interesting. Our Fib 0 got rejected exactly on the top of the long-term resistance line. From there price worked it's way down hitting all the other Fib levels, 23.60 -> 50.00, 50.00 -> 38.20, 38.20 -> 61.80. The break of 61.80 was the most imporant one. We broke it and didn't succeed to get above it again. From there the big dump started, moving even past Fib 127.20 but closing the daily candle perfectly above the long-term support line. Almost immediately after closing the daily candle it dropped EXACTLY till Fib 161.80 and bounced above 127.20 again. Coincidence? No, I don’t think so. Work of bots? Maybe, yeah. Most important is that we didn't have any close below our long-term support line.
Does that mean we have hit the bottom? Probably we did, as long as we have our daily candles close inside the big triangle we should be good.
So, looking at it in this way, it looked all predictable to me. Please let me know what you think, are you worried? Did you panic?
Thank you for having a look at my idea and please, feel free to share your thoughts with me!
Happy trading everyone!
I know we are all shocked about what happened this week, I guess almost nobody expected we would see dumps as big as this... is it the corona virus affecting the markets? Probably it is. Are people panicing? For sure. Is that normal? It is. Did BTC make an unexpected move? Probably it did. Would we have been able to predict it? I'm really starting to think we could. But that's easy talking after it happened. If you didn't check out my analysis from earlier this week, go check it here:
I know it didn't play out how I expected. Anyways, there are some important things I want to share with you to show you all that it is not that bad, and maybe we could have all expected this move to happen..
I always like to start my analysis from the higher timeframe and work my way down to smaller timeframes. That's exactly what we are going to do here.. let's start with the Monthly!
If we look at the Monthly chart we can clearly see BTC is still moving within a big triangle, starting with a long-term support line from March 2017 and a long-term resistance line from December 2018. We can see price wicked down the support line for the first time in 3 years. Even though we went below, we also bounced back quickly. If we close this monthly candle above that trendline we are still good to go and moving perfectly within the triangle. The question that can rise is; why did we wick down and why exactly there? We’ll get there in the Weekly chart.
As we see on the Weekly chart, we are also perfectly moving in between the triangle. Here is where we are going to look to our previous leg and are going to use Fibonacci. Previous leg was the leg from the week of 16 Dec ’19 – 10 Feb ’20. If we use that we can see that we hit 161.80 EXACTLY. Let’s move forward to the Daily chart since we will need some more details.
The Daily chart is where things are starting to get interesting. Our Fib 0 got rejected exactly on the top of the long-term resistance line. From there price worked it's way down hitting all the other Fib levels, 23.60 -> 50.00, 50.00 -> 38.20, 38.20 -> 61.80. The break of 61.80 was the most imporant one. We broke it and didn't succeed to get above it again. From there the big dump started, moving even past Fib 127.20 but closing the daily candle perfectly above the long-term support line. Almost immediately after closing the daily candle it dropped EXACTLY till Fib 161.80 and bounced above 127.20 again. Coincidence? No, I don’t think so. Work of bots? Maybe, yeah. Most important is that we didn't have any close below our long-term support line.
Does that mean we have hit the bottom? Probably we did, as long as we have our daily candles close inside the big triangle we should be good.
So, looking at it in this way, it looked all predictable to me. Please let me know what you think, are you worried? Did you panic?
Thank you for having a look at my idea and please, feel free to share your thoughts with me!
Happy trading everyone!