Bitcoin Gets Above Downtrend Channel! Here's What's Next! (BTC)
Hi friends! Welcome to this update analysis on Bitcoin! Let's get right to it. Looking at the daily chart, you can see that the third candle, in yesterday's "three white soldiers" pattern, did not close near it's highs. However, price has rallied hard on today's candle, producing a breakout above the downtrend channel. If you remember from yesterday's analysis, I said that "the three white soldiers pattern can produce a red day after the third candle in the pattern, and then resume a powerful move to the upside. Such a move would cause a breakout above this downtrend channel, and a test of the 50 EMA (in orange.)" As you can see, the thrid candle closed lower, but price resumed to the upside. So, essentially, the three white horses pattern did play out, but was not in textbook form on the daily chart. We saw the three candle rise, and a pullback (which took place inside of the third candle) and then a rally on the fourth candle that produced a breakout.
Now that price is above the top of the downtrend channel, we want to see it stay above. If BTC can close this candle above the downtrend channel, it greatly increases the likelihood of a test of the 50 EMA, which is currently near the $4390 mark.
On the MACD, momentum is continuing to expand to the upside, as buyers enter the market. As I've mentioned in previous analyses, we are expanding off of the second bullish divergence, in a series of two, that have extended through the entire bear market. So, there is a clear exhaustion in sell-side momentum, which could lead to a significant relief rally, should BTC overtake important resistance levels, such as the 50 EMA. If we see price rally above the 50 and hold it as support, I think there would be an extremely high chance that we will rally back into the "Major Overhead Resistance Zone," to actually test the 5775-6000 area, and potentially confirm it as resistance.
Regardless, it is important to remember that we are in a powerful bear market. Even if we rally to 6000, that would not change the overall structure of the bear market. Technically, if we run up and test the 6000 level as resistance, and fail there, BTC would just be printing another lower high on the chart. So, remember, the bear is strong, and will probably persist well into 2019.
As I write this, the breakout candle is pulling back toward the top of the channel. So, let's keep an eye on where today's candle closes. We know that we've at least pierced the top of the channel, weakening it as resistance. Based on this technical picture, I think a test of the 50 EMA is very likely. From there, we will have to see how BTC responds to the 50 EMA, to project the future direction of price.
Happy Holidays Everyone!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Now that price is above the top of the downtrend channel, we want to see it stay above. If BTC can close this candle above the downtrend channel, it greatly increases the likelihood of a test of the 50 EMA, which is currently near the $4390 mark.
On the MACD, momentum is continuing to expand to the upside, as buyers enter the market. As I've mentioned in previous analyses, we are expanding off of the second bullish divergence, in a series of two, that have extended through the entire bear market. So, there is a clear exhaustion in sell-side momentum, which could lead to a significant relief rally, should BTC overtake important resistance levels, such as the 50 EMA. If we see price rally above the 50 and hold it as support, I think there would be an extremely high chance that we will rally back into the "Major Overhead Resistance Zone," to actually test the 5775-6000 area, and potentially confirm it as resistance.
Regardless, it is important to remember that we are in a powerful bear market. Even if we rally to 6000, that would not change the overall structure of the bear market. Technically, if we run up and test the 6000 level as resistance, and fail there, BTC would just be printing another lower high on the chart. So, remember, the bear is strong, and will probably persist well into 2019.
As I write this, the breakout candle is pulling back toward the top of the channel. So, let's keep an eye on where today's candle closes. We know that we've at least pierced the top of the channel, weakening it as resistance. Based on this technical picture, I think a test of the 50 EMA is very likely. From there, we will have to see how BTC responds to the 50 EMA, to project the future direction of price.
Happy Holidays Everyone!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Kommentar:
PS. The arrows on the chart remain from yesterday's analysis, but are somewhat irrelevant now. If price closes above the downtrend channel, we are not likely to fall back into it, before a test of the 50 EMA.
Kommentar:
The arrows were only illustrating that the fourth candle can pull back, after the three white soldiers.