The short answer.
It's is likely that this is at least a medium term bottom.
There is a good chance that this could be a long term bottom and we never see bitcoin lower
There is still a chance that we just bounce and go lower.
Not surprising, bitcoin slowly leaked down until it flat out ran out of sellers, hit a wall of buy orders and aggressively shot up. A lot of short covering and now FOMO buyers have taken it up fairly high. Based on the volume, the probability of being at least a mid term low is excellent.
I'd like to see bitcoin reach a short term high in this area and then pullback in the next 12 hours and form a support zone. I created a fib retrace and a buy box between the .382 and .618 fibs. You may have to redraw this if goes higher. A trader that wants to go long should get an opportunity to buy in that zone with a stop at lows.
It's important to see this move back into this buy zone. Ideally we fall back and just form support. Trading in the pullback for a good 6-12 hours would help create a strong support area. Big money gets a chance to reaccumulate.
Otherwise, if we just shoot up without a retrace, then its more likely just panic buyers rather then institutional buyers. V bottoms are rare. We had one last fall but that was during a huge bull run. This type of move down, needs to build support. If we just go straight up to $9k or $9.5k then that means institutions are just letting retail traders drive it up with no sell orders so they can build big shorts then drive the panic cycle one more time. Especially if volume really falls off.
So to see the market pullback and build support would be much better. This is what we mean when traders say test or retest. The market needs to go down a bit say, "OK, is this price right? Is this really the low? Are there buyers that find this price attractive?" We want the retest within $500-$800 of the lows. If it goes to $9500 then only pulls back to$8700 then the market really never tests the lows and it opens up the door to making new lows.
Look at the candle formation on 12-22. That candle shot straight up with no retest, so it opened up the door to come back down, which is what happened. We don't want to see that.
Lets see if the market can build support here and give us some confidence to go long.
It's is likely that this is at least a medium term bottom.
There is a good chance that this could be a long term bottom and we never see bitcoin lower
There is still a chance that we just bounce and go lower.
Not surprising, bitcoin slowly leaked down until it flat out ran out of sellers, hit a wall of buy orders and aggressively shot up. A lot of short covering and now FOMO buyers have taken it up fairly high. Based on the volume, the probability of being at least a mid term low is excellent.
I'd like to see bitcoin reach a short term high in this area and then pullback in the next 12 hours and form a support zone. I created a fib retrace and a buy box between the .382 and .618 fibs. You may have to redraw this if goes higher. A trader that wants to go long should get an opportunity to buy in that zone with a stop at lows.
It's important to see this move back into this buy zone. Ideally we fall back and just form support. Trading in the pullback for a good 6-12 hours would help create a strong support area. Big money gets a chance to reaccumulate.
Otherwise, if we just shoot up without a retrace, then its more likely just panic buyers rather then institutional buyers. V bottoms are rare. We had one last fall but that was during a huge bull run. This type of move down, needs to build support. If we just go straight up to $9k or $9.5k then that means institutions are just letting retail traders drive it up with no sell orders so they can build big shorts then drive the panic cycle one more time. Especially if volume really falls off.
So to see the market pullback and build support would be much better. This is what we mean when traders say test or retest. The market needs to go down a bit say, "OK, is this price right? Is this really the low? Are there buyers that find this price attractive?" We want the retest within $500-$800 of the lows. If it goes to $9500 then only pulls back to$8700 then the market really never tests the lows and it opens up the door to making new lows.
Look at the candle formation on 12-22. That candle shot straight up with no retest, so it opened up the door to come back down, which is what happened. We don't want to see that.
Lets see if the market can build support here and give us some confidence to go long.
Kommentar:
Also if this is a test of the break of previous lows on 1-17, then we could very easily start another trend down to new lows.
Kommentar:
We're consolidating near highs which is good so we should print a nice looking daily candle. I'd like to see us come down a bit more and test the 50% retrace near $8300. Even consolidating in the range for a day would help. It would build an area that would be hard to move under.
Closing higher in the next 2 days would be ideal. If we do move up then we'll have a battle at $10k in that yellow box. If we break that area then we should be on the way to testing that resistance at $13k. Break $13k and bitcoin will be in good position to make new highs.
If we struggle at $10k, then its possible we make one more wave down to complete the descending wedge. Even though that would make another low it still would make for a good correction and I'd feel confident in a low at that point.
If we have an hourly close back under $8k, then we get more room on the downside, but I don't think thats likely.
We're consolidating near highs which is good so we should print a nice looking daily candle. I'd like to see us come down a bit more and test the 50% retrace near $8300. Even consolidating in the range for a day would help. It would build an area that would be hard to move under.
Closing higher in the next 2 days would be ideal. If we do move up then we'll have a battle at $10k in that yellow box. If we break that area then we should be on the way to testing that resistance at $13k. Break $13k and bitcoin will be in good position to make new highs.
If we struggle at $10k, then its possible we make one more wave down to complete the descending wedge. Even though that would make another low it still would make for a good correction and I'd feel confident in a low at that point.
If we have an hourly close back under $8k, then we get more room on the downside, but I don't think thats likely.
Kommentar:
We are getting the price action I wanted to see. A dip to the .618 was a perfect entry. Hit exactly in the line on coinbase and also hit that long term trend line that I created before the overshoot. That is the market testing price and saying "OK, $8124 is too low, everyone bought it. Lets try higher."
I was able to exit the short, took profit closer to $8500 and started a small long position since it looked like the 328 could hold it. The 618 test allowed me to build a big position long. It looks like we'll get some kind of an inverse head and shoulder. So around $8500 I'll look to add if we get there. A stop below that $8100 area is aggressive. Below the 768 line and $8k is a good stop. And of course, you could stop below the recent low.
But this is why you pull fibs, make your buy box and put in orders. It was fast so if you weren't watching you don't get in.
Moving sideways here is just fine. We could be be building an important area of support. Get past $9200 and bitcoin works on $10k. I will take some profits at that level. We are in a weekly bear, so this is technically a counter trend trade. I don't have high targets as we have higher risk. But I take profits in heavy resistance and re-assess to determine if I want to rebuild a long or go short.
We are getting the price action I wanted to see. A dip to the .618 was a perfect entry. Hit exactly in the line on coinbase and also hit that long term trend line that I created before the overshoot. That is the market testing price and saying "OK, $8124 is too low, everyone bought it. Lets try higher."
I was able to exit the short, took profit closer to $8500 and started a small long position since it looked like the 328 could hold it. The 618 test allowed me to build a big position long. It looks like we'll get some kind of an inverse head and shoulder. So around $8500 I'll look to add if we get there. A stop below that $8100 area is aggressive. Below the 768 line and $8k is a good stop. And of course, you could stop below the recent low.
But this is why you pull fibs, make your buy box and put in orders. It was fast so if you weren't watching you don't get in.
Moving sideways here is just fine. We could be be building an important area of support. Get past $9200 and bitcoin works on $10k. I will take some profits at that level. We are in a weekly bear, so this is technically a counter trend trade. I don't have high targets as we have higher risk. But I take profits in heavy resistance and re-assess to determine if I want to rebuild a long or go short.
I'm a bit concerned with this price action. We moved up $1500 with very little retrace. Do you think big money had a chance to accumulate for a move long? I don't' think so.
This looks more like a professionals pulling shorts and letting retail traders FOMO up so they can reset shorts. So I'm shorting this because I expect some kind of pullback and then I'll have to decide whether I want to sell my shorts and go heavy long based on price action.
We need to retrace then build some consolidation. This would allow big money to accumulate. And it would help build a base of support. The longer we could accumulate the better.
If we have a quick retrace to the .382 or .50 and go higher, I'll be a bit worried that we are only going up to $13k to retest that triangle trendline before coming back down.
Again. Lets see what happens with the market