Bitcoin is obviously starting to flatten out and lose momentum. The MACD is showing bearish divergence; Bitcoin's price is rising, but the MACD isn't getting any higher. That means that there are not enough buyers left to push the price anymore. The lack of buyers is further shown by the declining volume. Each sequential spikes in price had less and less volume, indicating less and less money are pouring into Bitcoin. In addition, a bearish rising wedge has been formed. That means the price of Bitcoin has gone up too much too quickly and is due for a correction.
However, I believe this correction is only short-term. The falling wedge could be a leading diagonal of wave 1. If that is the case, we could get targets of $23,000 after a short correction phase! It also mean that we have yet to see the biggest impulse wave in all of Bitcoin's history (disclaimer: in terms of $ gained not % gained)!
The correction gives us a buying opportunity for those who missed out when I predicted Bitcoin would bounce of 13,000. It is important that we buy when the price dip and not when prices rises. Warren Buffett once said, "Be Fearful When Others Are Greedy and Greedy When Others Are Fearful". Everyone is predicting that Bitcoin resumed its downtrend, but we need to remain calm and know that its the only time we can get the best price. Others are fearful, we buy.
Note: Some may say that we are forming a big double tops pattern (red semi-circles). I would disagree. One of the rules of the double tops pattern is that the last leg have to retrace to the middle dip. For the double top pattern to be valid, we would have to retrace to $13,000. If the pattern completes, we could see prices of 11,000!
Thanks for your analysis, this markets still looks very strong indeed.
jjsbmb
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I really like your analysis, thank you for providing details about volumes and the indicators you are looking at.
I am still new at this and I was wondering which time frame you are looking at? If you are looking at the short time frame, do you expect the correction to be over a short time?
Thank you
aoeuaoeu
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@jjsbmb, This is the 1 hour chart. The time frame can be found on the top left. Next to Bitcoin/Dollar, it says 60, which means 60 mins.
The correction process may take several days. However, it might even be completed by now with Bitcoin just briefly touching our buy zone. Still, I think Bitcoin might touch the buy zone a second time.