BitcoinShort
Bitcoin About to Repeat 2020 Fractal!?!
Aktualisiert
In mid August 2020 bitcoin was putting in something on its daily chart eerily similar to what is happening currently with the bitcoin price action. That 2020 chart is not shown here, but just to quickly recap for those who were not around then, bitcoin was coming out of a long bear market, putting in higher highs and higher lows, to the point of finding itself overextended inside of a rising parallel channel with triple bearish divergence on its RSI.
This of course would result in a violent yet swift correction to the downside that sent the price to levels most people at the time was not anticipating.
Fast forward to the present, and when we look at the chart, what is happening?
Bitcoin is coming out of a bear market, putting in higher highs and higher lows, finding itself now overextended inside of a rising parallel channel with triple bearish divergence on the RSI ladies and gentlemen.
Keep in mind that one does not need to view this as a fractal. Simple technical analysis tells one that when you have ascending price action accompanied by a bearishly diverging RSI, a correction most of the time ensues.
As of yet, we have not had the corrective follow thru in price action but as we enter into the new trading week, one has to believe it is now imminent.
So what levels should we be interested in as a buying opportunity if we breakdown?
I can start off by saying that a shallow move to the downside is extremely optimistic. And although price can reverse at any random point, it would not be wise to go long if we are to react at any shallow pullback in price. It is my humble opinion, that if we are to confirm a breakdown of the key 29500 level on the daily, the most optimum level for a long would be at the deepest level possible where one can strategize a proper stop loss. That would be the 88.6% fibonacci retracement from our recent high down to 24758, which puts the entry at about 25500.
This also is an area where a value area low is located which gives this spot great confluence.
Bitcoin in August of 2020 made this same deep retrace to a VAL area before finding a bottom. And not just a bottom but THE bottom. Bitcoin would never come back to those levels ever again and would run all the way to 69k.
That is why everything in this idea is so important.
What about levels before 25500? One has to believe that there is some sort of bounce area before the extreme value area low.
Well if we look at the present chart, we see a nice range between our 61% retracement (27500) and the point of control (POC) of the value range at about 26800. Any support level above those 2 will be extremely thin and will most likely result in nothing more than a dead count bounce. Short sellers will jump heavily at any bounce if and when we begin to breakdown which is why any bounce at a shallow retracement will be difficult to trust as a bottom/reversal spot.
Many people are beginning to flip their bias short, so naturally, one must gameplan if this does not playout.
A scenario in which this bearish idea may be invalidated, could come about if price action maintained itself above 30k while the RSI and any other bearish looking oscilators reset. If the RSI can find itself back into the neutral zone before a breakdown occurs, there would be hope that a severe correction in price may be avoided. One way or another, however, something now has to give and correct itself. The question, is will it be the indicators, or the price action on the chart just as it did nearly 3 years ago to date.
Either way, one last buying opportunity of a lifetime for the number 1 cryptocurrency asset could be just on the horizon.
This of course would result in a violent yet swift correction to the downside that sent the price to levels most people at the time was not anticipating.
Fast forward to the present, and when we look at the chart, what is happening?
Bitcoin is coming out of a bear market, putting in higher highs and higher lows, finding itself now overextended inside of a rising parallel channel with triple bearish divergence on the RSI ladies and gentlemen.
Keep in mind that one does not need to view this as a fractal. Simple technical analysis tells one that when you have ascending price action accompanied by a bearishly diverging RSI, a correction most of the time ensues.
As of yet, we have not had the corrective follow thru in price action but as we enter into the new trading week, one has to believe it is now imminent.
So what levels should we be interested in as a buying opportunity if we breakdown?
I can start off by saying that a shallow move to the downside is extremely optimistic. And although price can reverse at any random point, it would not be wise to go long if we are to react at any shallow pullback in price. It is my humble opinion, that if we are to confirm a breakdown of the key 29500 level on the daily, the most optimum level for a long would be at the deepest level possible where one can strategize a proper stop loss. That would be the 88.6% fibonacci retracement from our recent high down to 24758, which puts the entry at about 25500.
This also is an area where a value area low is located which gives this spot great confluence.
Bitcoin in August of 2020 made this same deep retrace to a VAL area before finding a bottom. And not just a bottom but THE bottom. Bitcoin would never come back to those levels ever again and would run all the way to 69k.
That is why everything in this idea is so important.
What about levels before 25500? One has to believe that there is some sort of bounce area before the extreme value area low.
Well if we look at the present chart, we see a nice range between our 61% retracement (27500) and the point of control (POC) of the value range at about 26800. Any support level above those 2 will be extremely thin and will most likely result in nothing more than a dead count bounce. Short sellers will jump heavily at any bounce if and when we begin to breakdown which is why any bounce at a shallow retracement will be difficult to trust as a bottom/reversal spot.
Many people are beginning to flip their bias short, so naturally, one must gameplan if this does not playout.
A scenario in which this bearish idea may be invalidated, could come about if price action maintained itself above 30k while the RSI and any other bearish looking oscilators reset. If the RSI can find itself back into the neutral zone before a breakdown occurs, there would be hope that a severe correction in price may be avoided. One way or another, however, something now has to give and correct itself. The question, is will it be the indicators, or the price action on the chart just as it did nearly 3 years ago to date.
Either way, one last buying opportunity of a lifetime for the number 1 cryptocurrency asset could be just on the horizon.
Anmerkung
So this idea so far has strangely followed the fractal almost candle by candle. Which now means, if this is to continue, a major MAJOR move to the downside may occur today. With tomorrow being the last day in the trading week, it would not be completely out of the ordinary that we see the follow-thru in price action to the downside going into the weekend.Anmerkung
So on Friday we did not see any type of follow thru in bearish price action, but to close the week we did get a breakout on the weekly chart of the bearish rising channel. This is truly a methodical structure that requires meticulous price action in order for this bearish idea to confirm. Look for a backtest this week of former support before we get a breakdown of 29500. This will be the next level of support that will need to break this week before the major breakdown in price can occur.Anmerkung
Less than 24 hours ago I posted an update mentioning that a breakdown of the 29500 level was imminent this week and first thing to start the new week we have received it. It was expected that once 29500 broke down, a move to the downside would be swift. It has just confirmed on the daily a little while ago and although not illustrated on the above chart, we have fallen straight to the 1st expected level of support around 29000. The question is, will we copy the 2020 fractal I illustrated and bounce back up to the structure?
That is a tough answer as with bitcoin anything is possible meaning we very well could. If we are to bounce, look for a retest of the 29500-29600 area. If price is able to get back above this - and hold, there is a decent chance that bulls could regain the momentum and retest the previous 31000 highs.
This breakdown on the daily has not yet confirmed on the weekly as it is just Monday, so more volatility is somewhat expected. The daily RSI still has plenty more room to the downside, so if we are to get more follow-thru in downside price action, the next level I am watching would be 28343.
This is the spot where I would expect a significant reaction in price as many shorts would be taking profit here I believe. The reason being is that this is a 61% fibonacci retracement area.
We are at a point where there are now many possible outcomes, and if you are short this is not a bad time to take some profit.
Anmerkung
Technical breakdown of 29k on the daily being attempted. We may dump but anything too far too fast will get bought up until confirmed at the close 21 hours from now. But once confirmed, 28400 will be almost certain. And the way its looking on larger timeframes, possibly even further downside. And it may not be the quick move down and bounce back to 31k.. it will be long and slow dragging out for weeks until proper reversal-type-market structure is put in. Its my hope this wont be the case but as I said before I think we are multiple months away from the real bull market kicking off.My hope is that we dump straight down to the 28400 (approximate) target and wick back up at the close. Thats the "bullish" alternative but not a strong bet to make. Even if it actually happens.
Verbundene Veröffentlichungen
Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.