Bitcoin making a very weak rally, 7200 than up to 7800

31. Mai 2018

Bitcoin's rally has been very weak so far. Yesterday's drop was a first signs that the rally is not that strong yet. Not because the price, but the speed of the drop showed how fragile the rally has been. I said that i would be very surprised if the price would break the low at 7100 and still expected a continuation of the rally, at least as long as the 7250 would hold. Luckily it did and after a long time of going sideways around 7300, eventually the price made another squeeze up, just like the whales controlling the market love to do. But this rally was very dissapointing as well, because it only got slightly higher than the previous high at 7500. So far it has allot of troubles getting above the 7600 and because of this it seems it has formed a bearish wedge. There is still room for it to go to 7650ish, but it think that will be the max for this rally.

In a previous update i posted a chart with these same 3 lines. With the blue and green line being the most probable scenario's, but now i think the green one will be what will probably happen. Several alts have also shown a weak rally as well, indicating the market is not ready yet to push it higher without testing a new higher low. Where this low will be is of course a wild guess, but i think it will be around the 7200. From there i think we will see another wave up to complete this upwards correction.

My general view is still bearish for the medium term, so i expect that IF we rally up towards the 7800, that we will probably resume the downtrend again and go below the 7K. Only a rally above the 8200ish could change my mind on this. Worst case scenario, is following the red line, which means we will drop the coming days and not make a higher low. If this happens and we break the 7K, things could get very VERY ugly.


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David

Previous analysis

31. Mai 2018

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Hanging on support now, in theory it could go up again, but i give that 10% :), think it will break

1. Juni 2018

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So the 10% has won :), anyway we went up again but still no big strong rally to break this wedge, so nothing has changed! Just a delay of the drop as far as i see it.

1. Juni 2018

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Yesterdays low broke by a minimum, but we should see more downwards action now. But I have to say, alts are still strong at the moment, so no real confirmation there. But could still come if course

1. Juni 2018

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Here we can see a more clear picture and the difference between todays drop and yesterdays drop. Target of this bear flag should be around 7200/7150. But as we all know lately, these flags get invalidated more often than reaching their targets.

1. Juni 2018

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And again is almost seems like the flag will get invalidated, if it gets above 7480 i consider the flag invalidated. Than it probably was just another shake out of high leveraged traders

1. Juni 2018

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You know what the biggest achievement for crypto would be? At least for day traders, swing traders and even long term investors actually. The day that all coins move independently of Bitcoin. Than this sideways movement would maybe even be good for us.

2. Juni 2018

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So clearly it was just a shake out, AGAIN! The move Bitcoin made yesterday, dropping below that previous low and than just going up again like there is nothing to it, is something we see more than enough with Alts, but not with Bitcoin. These are not normal market movements. Could mean we are in an accumulating phase again similar to the 6500 from 2 months ago, since many alts are break their down trends the past few days. I am still quite sure that we will make another drop again after this rally, but i am less sure about my view from a earlier this week, making a big drop below the 7K/6K. Even now BTC is still not rallying above that resistance line of the wedge, so it will probably drop again very soon. But can't say it it's 7400 or 7100.

I always have this rule, sounds crazy and stupid but you have to understand the context i am saying this. If something doesn't want to go down (because of a certain pattern) it clearly wants to go up than. This actually is about the moments when certain clear bullish or bearish patterns get invalidated. Like the bearish wedge Bitcoin has made this past few days which got invalidated (probably, not sure yet). But those bear flags that get invalidated, especially yesterday's, shows the same thing.
When you look at my most recent ETH chart, you have a better example actually. All the signs were there after it broke the support line of the wedge, it even broke small neckline it bounced up from 2 days long. But still just going up again like there was nothing bearish going on. So even though it's not convincing yet, it will probably break the 600 and make another small rally.

As most of you know, i hate this sideways action, moving a whole day within 50 points and spiking 100/300 points up or down and repeating the same cycle again for days. TA gets very unreliable during those periods. Most of you know what kind crazy calls i can make sometimes, but those can only be made when the market is moving naturally with more volume and more volatility. These moves have been going on for a few days already and now it's also weekend again, which will make that even worse probably. I have decided not to trade at all this weekend, just waiting patiently for Monday again.

I know for a fact that a certain percentage find this very hard, because your trying to catch good prices in case a bull run happens again and you don't want to buy at higher prices because than you take the risk again of being shaking out during a downwards correction. Well that is the freedom day trading gives you, it doesn't matter where we are with the price, as long as there is some volume and volatility. But even that can be addictive of course :).

About the current price action again, your guess is as good as mine :) Beginning of these week i was calling for 7700/7800 but after the rally was getting so weak and slow and that inverse H&S got turned into a bearish wedge, i just changed my mind. Me and my homeboys went long at 7400 (when it dropped to 7300) waiting for 7800 but turned short around 7550 when bullish momentum disappeared. Dropped to that 7400 but went back up again and stopped through our entry point just to short it again around 7550 waiting for 72xx and again went through the stop and our strategy for this weekend is, trying to enjoy some free time :). There is just no clear direction and it's just guessing what it can do next, meaning no great setup for a trade. I have a feeling we could see a big move coming week, but i just can't say yet if it's up or down. All we can hope for is that we get some clear signals before the move happens. My best advice i can give you know, enjoy the weekend :)

2. Juni 2018

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In the most bulluish scenario, a bull run what many are hoping for, my best guess is that we are at this stage. Why i think we make at least another dorp before going up again and of course the weight of the wedge is still hanging above it as resistance. A week ago i was like 80% bearish but that has dropped to 60% :)

2. Juni 2018

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I answered a comment of someone, who was complaining about how easy it is to show several options of what Bitcoin could do, with the intent that i can never be wrong and i can always say i was right. I know most of my followers know better, but i offered to explain it and he/she took the offer. I thought it was worth posting it here as un update as well.........




I am going to keep it a bit short since i am "free'" today :). TA or predicting the market is never an exact science. When i shorted the market at 10K i assumed the big bull run was over and we were headed down. But i always try to stay objective and was saying that as long as the market stays above the 8700, it's still very bullish and above the 8000ish less, but still bullish. Since i don't try to hit home runs in day trading, i try to catch smaller moves, from 100 to 1000 points (months ago it was easy catching 2K/3K even). I know how markets usually move, with this i mean, that after a big drop we usually see a consolidation. When this happens, there are several options of the formation this consolidation can have. It can become a bear flag, with the second wave higher than the first, or it becomes a triangle with the second wave LOWER than the first. It's impossible to know this upfront. It could even be the low from which a new rally starts again, meaning the bearish view is wrong.

Like in this chart above, after we made that squeeze up from the low, I have been saying me will probably move up towards the 7800. First it looked like it would form an inverse H&S, but it was taking to long and it turned into a rising (bearish) wedge. So at first i was long around 7400 but when it was taking to long to push higher at the 7550, i decided to take profit and turn short. Thinking the wedge would break and we would make a higher low first before going to the 7800ish.

Those 3 lines, i had them in my chart a few days ago as well. From my experience in watching charts, i make my best guess of what the price could do, which path it could take. After doing that, i choose one of those from what i think is the most likely to happen, looking at certain indicators, sentiment etc. Very simple, if the price would drop to the 7300, following the green and red line. I trade on the green one, because it was what i thought would probably happen. But if it would drop below the 72xx and even below the 7100. Than i am quite sure it will follow the red line and than i already know upfront what the Bitcoin will do when it breaks the support.

Because i do it like this, i am prepared and i protect myself from making impulsive/emotional decisions. When you have experience in trading, you would know that trading on emotions, your a guaranteed looser in the long run. That's common knowledge.

My second reason why i show several options, even though i predict the bigger waves quite accurate, there are also moments that i am wrong. Even my followers know that, so lately i provide my second and third best guess of what the price could do, so my followers have some guidelines. As i have been telling for so long already, trading is not about being right, it's about making profit. But unfortunately many crypto traders don't understand that and they keep talking about your wrong or right.

Small example about this, me and my few members went long on NEO around 51,5 going for a target around 57/58. But when Bitcoin was stalling around the 7550, i decided to take profit on NEO at 53.50 and BTC at 7550 and we turned short on Bitcoin. We know what happened the last few days, NEO touched the 57.50 so i was right, right? But did it help me or earn money, no.

3. Juni 2018

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So far it seems it has followed the green line of the primary chart, even though i though it would go slightly lower before go up again. Anyway the signals are still not very clear. That inverse H&S i showed earlier this weak, which looked like it would fail, has taken another form now. We do have a clear neckline around 7600 and it gives a target around 8100. But i the movement up since the low is not very convincing to me. Still moves inside a wedge, but that's usually the case with an H&S. As long as the price stays above the 7600/7550 we have to assume we go towards the 8000. Alts are showing nice rallies as well, so could be the focus of the market is on Alts at the moment. Volumes are not that convincing as well, they don't confirm the rally but they also don't confirm the bearish wedge.

I still think the med term (coming weeks) is more bearish than bullish, but for the short it seems going higher has the smaller advantage. Think the 7550/7600 is a good level to see as a turning point

3. Juni 2018

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I have scrolled again through my list of Alts, think their all in the top 50 and i have like 25 in my list. Many are really showing similarities as in April, from the low and the rally afterwards. But this time it's different it seems, because BTC is not showing real strength. Therefore i am still very hesitant to think the low is set and we are going to 9K+ again. I have another theory going through my mind the past few days, this one is not that exciting but is positive for the market. That is, that Alts are maybe slowly detaching themselves from Bitcoin? Could be a reason why Bitcoin is not confirming THE low yet. Before the ATH there was a certain strategy, than until the 6K low in Feb there was another, after that another. Maybe we have entered in another dynamic of the market. But it's to soon to say, and i have not figured it out yet. Maybe a good time to take a break for a week or 2 and afterwards looking at what has been going on and trying to figure out the puzzle. You guys now i figured out the puzzle during the April low, but i have not yet on this move.
Still think we need to see a climax low before thinking about a new bull market, for the med term (weeks/months) . But again, the short term (coming week or 2) is not clear yet. Big chance the rallies have to cool down a bit, but i am staying flat. Waiting for a better chance to short at higher prices, or to go long after a correction has been made.
Taking a break (for each trader) is a necessity to preform at your best on the long run. I have not had that luxury because of TV.

Tomorrow i have a day off because i am away, so i will try to post an update later today, otherwise Tuesday again. I have read all the comments, i want to thank everyone for the kind, grateful and motivating comments :)

3. Juni 2018

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Looks like we will make a drop, some alts are showing top formation so it looks like we are ready to make a correction now

3. Juni 2018

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3. Juni 2018

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Dropped out of that wedge, but just when it seemed to accelerate down it bounced up from that support area. Think the green and red are the turning points.