Jump to content

Bitcoin, a purely technical view

Recommended Posts

Early days but Bitcoin appears to be motoring after a V-Bottom turn with a bounce off the Weekly/Daily supporting trend lines.  Looks like a retest of the upper retrace/consolidation line (Triangle) is on the cards.

XBTUSD-1-hour_271119.thumb.png.60b690161e39ef2805de16c737edd592.pngXBTUSD-Daily_271119.thumb.png.1d7190ead9579a5b2477a56c03c143b4.png 

Share this post


Link to post

Looks like a potential Head & Shoulders trend change with PMD at the Head turn and with a 1-2 bullish retrace at the left shoulder followed by a neckline break and now a potential upper channel (consolidation) breakout.  If correct this would be a significantly bullish development.

XBTUSD-Daily_070120.thumb.png.ce9266cf28b854a1a1352d5ec5b19ca4.png

 

  • Great! 1

Share this post


Link to post

Possible breakout retest fail occurring at or around both the neckline and channel levels.  Price is peeping out over an important support/resistance level.  We could still get another leg down on this but Bitcoin does have a habit of breaking out fast...

The move down can be labeled as an A-B-C (1-2) retrace, which is what I would expect in trend change scenario after a head & shoulders neckline break out.  There is PMD on the 1H chart at the recent turn.

Overall I remain bullish on the breakout and trend change back into a longer term rally phase.

XBTUSD-4-hours_100120.thumb.png.7732b82b83822a6e88d29aa36dc72a32.pngXBTUSD-1-hour_100120.thumb.png.08b50f95efe2d7241df5830423c23401.png

Share this post


Link to post

Bitcoin might well be looking to retest that neckline and/or the weekly chart channel line.  Fib 62% (7470) looks favourite to a bullish turn if we do get a bearish move on this.

XBTUSD-1-hour_130120.thumb.png.49f8fd8b4a06807f7861410a6344298c.png

  • Like 1

Share this post


Link to post

Another market getting interesting now is Bitcoin.  We didn't get a second test of the weekly channel and neckline as price turned up and posted a new short term high.  There are a couple of important resistance levels to clear (my red lines at circa 8,600 & 10,000) by which time the rally should be well on its way after that classic breakout and failed retest set up.  If we get all that then I would expect a break of the previous high at 14,000 at a minimum and after that who knows...

XBTUSD-1-hour_140120.thumb.png.a8197e0f051d4cc138c7e9aee7b7320b.pngXBTUSD-Daily_140120.thumb.png.2bcc0f98408cbad9efbb3ab2b70ce30e.png

Share this post


Link to post

A buy the dip moment has passed on Bitcoin and with a break to a higher high in prog we may now see a test of the critical 10,000 resistance level.

XBTUSD-1-hour_150120.thumb.png.f8e8589a9c4ce41621298b539ef7a08e.png

Share this post


Link to post

Watch out Bitcoiners!  Quite a bit of resistance at 9000 at present with a possible 1-5 up completed and NMD on the 1H chart.  We could see a bit of retrace price action down here with 8500 and 8300 in focus for a turn back up for another, stronger, assault on 9000.  The Daily still looks LT bullish but a break of 9000 with a daily close above is needed for a follow on.

XBTUSD-1-hour_170120.thumb.png.5cd629b7e44bdb7daa66567d2fe45579.png

  • Like 1

Share this post


Link to post

Weekend price action on Bitcoin is suggestive of a wave 1 turn that may produce a wave 2 retest of the H&S neckline or channel line.  Thoughts of a test of the key resistance level of 10,000 ,may be suspended until this retest occurs and produces a strong rally.

XBTUSD-Daily_190120.thumb.png.984c96f8d7c0624ecce15a4530519587.png

Share this post


Link to post

Bitcoin is really sketching out almost perfectly from a technical analysis perspective:

  • We have had a turn at the bottom of a narrowing channel (or consolidation Triangle)
  • We have had a head & shoulders pattern through this bottom, which alas did not quite close a price gap (this is my only pause for concern on a major rally phase being in play)
  • There was strong PMD at the Head bottom.
  • We have has a H&S neckline breakout and a coincident weekly channel breakout and a short term failed retest of these then a rally away.
  • We have has a second EWT 1-2 (blue) (first is noted as pink), which hit the Fib 38% and then broke resistance last night.  This is very bullish.
  • Right now we are looking at a smaller 1-2 (1H chart) however there is always the possibility that the recent breakout zone will be retested before the next assault on 10,000, clearly a point of important resistance on the charts.

XBTUSD-Daily_290120.thumb.png.1a5844b6cb6909751ba8e7131cfb24a5.pngXBTUSD-1-hour_290120.thumb.png.2736dc1fb8f74d8a4869c7822dab9173.png

Share this post


Link to post

There are 2 technical ways to look at bitcoin price action now.  The first is a series of buy the dip patterns that ought to push price back above 10,000 and on to test 14,000 in short order, as laid out in my previous post.  The second is that this is the end of this particular bullish phase and a deep retrace is on the cards before that bull market takes over again.  I don't see a long term bearish scenario at this juncture.

The technical set up for scenario 2 is like this:

  • We have has a breakout of both a strong channel and H&S neckline at the turn of the year
  • The rally has been strong and fairly relentlessly bullish with a few pull backs but no significant retrace
  • The form of the rally can be described as a 1-5 (motive - i.e. direction of the longer term trend)
  • After a 1-5 motive wave we usually get an A-B-C counter trend move
  • There is NMD on daily and 1H charts at the recent turn at resistance zone.  The move back down was sharp and looking like a rejection of the resistance test.

It is at least 50/50 now and if we get a close below today than some form or counter trend move can be anticipated.  It could retrace a lot further than people think, most being now bullish again as a result of the breakout and rally I am guessing.  A firm break and close above the resistance zone would be needed to revert to scenario 1.

XBTUSD-Daily_100220.thumb.png.215a77e333686493d099f2a908c94c49.png

  • Like 1

Share this post


Link to post

SO Cryptos are breaking out and next stop the moon!  Well maybe there is some significant upside potential now that the large consolidation Triangle has indeed been broken with a credible Head & Shoulders pattern at the turn (plus PMD, plus credible A-B-C counter trend retrace EWT labeling).  We also have a coincident H&S neckline break and a fast rally away.  So far so good.  But markets do not move in straight lines and the last big rally surely had a huge retrace bear move.  On the current rally price was stopped at 10,500, a credible resistance zone according to the chart price action after a 1-5 wave form.  The turn occurred on NMD with RSI and Stochastic coming out of over bought and now price is hovering just above a bullish channel lower line.

My take on this is that a counter trend bearish phase is underway that might even get back down to retest the neckline or thereabouts.  If we do see a channel breakout then we can perhaps at least look forward to a Fib 50% test, coincident with a one of significant support.  Note counter trend moves tend to go in either a simple A-B-C form or a much more complex form with lots of whipsaw price action so they can be treacherous to trade.  It is hard to hold for the compete move from here but targeting an initial wave A that might make, say, the Fib 38% might work, after than a sell the rally off the wave B top might be on but this is all speculation at this stage, need to see the moves price action develop.  The big opportunity here is to catch the turn back Long after the retrace is done.

My personal approach is to Short the break of the lower channel and seek the wave A turn to take profits, leave it alone until I see that wave B and then see of there is another Short, but this may prove tricky and if I miss it OK but then wait patiently for the next rally wave to present itself.  Such a wave would be a wave 3, which is absolutely the one you want to catch as it will run and run.  This is where I would turn trend follower and hold and buy the dips!

Should be an interesting few months perhaps.  My view on Bitcoin is that it is a risk on asset not a risk off one.  It is currently a speculation on the future but that future has not yet arrived and IMO will not until there is a major financial system catastrophe (including a rampant USD), which I believe is on the cards.  If my view on Bitcoin being a risk on asset is right then we could be coming into a risk off period as Bitcoin falls.  Stocks are at ATHs and maybe showing a reluctance to jump further and that despite SP500 earnings beating expectations so far (70 odd % of the way through reporting) and US economic data seemingly pulling up...  Or maybe that impetus is simply coming t an end.  Gold and Silver seem to be catching a bid and USD is also strong.  Who knows, maybe the big rally on Bitcoin would coincide with a big turn down elsewhere as the speculation is fueled by the fear of that big catastrophe and Bitcoin being the future...

For now, for trading, purely on a technical assessment, the lift off seems to be suspended. 

XBTUSD-Daily_160220.thumb.png.9e979a948149a96de897563281389b23.png

  • Thought provoking 1

Share this post


Link to post

Updated chart from yesterday.  The original supporting trend line still holds but is more of a 4H/1H chart line.  There is a better lower channel line on the daily chart and price is just testing this now.

XBTUSD-Daily_170220.thumb.png.3f113379e6b25c5cf7e7889c70a6cbb2.png 

Share this post


Link to post

So a strong bounce off the lower channel line but then an equally strong bounce off the 4H chart trend line and then a break of the daily channel line to the downside in some style.  I would expect this to resume a strong bear phase maybe even to retest the neckline.

XBTUSD-Daily_220220.thumb.png.521d99385b5ca9eafb58783d3fef48e6.png

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Member Statistics

    • Total Topics
      11,524
    • Total Posts
      58,688
    • Total Members
      77,709
    Newest Member
    Nessi
    Joined 13/07/20 11:16
  • Posts

    • FIRST MINISTER OF WALES MARK DRAKEFORD SAYS FACE COVERINGS WILL BE MANDATORY ON PUBLIC TRANSPORT IN THE NATION FROM 27 JULY - SKYNEWS
    • March;  Deputy Chief Medical officer Jenny Harries says masks are 'not a good idea' https://t.co/YnTijZGT5b   April;  Deputy Chief Medical Officer Jonathan Van Tam says 'We don't recommend face masks' https://t.co/UWf6hrcYYM   A few weeks ago;  Chief Medical Officer Chris Whitty says 'Don't wear masks' https://t.co/TYGWe4tbch   Today;  'more-mask-measures-coming-in-days' https://order-order.com/2020/07/13/more-mask-measures-coming-in-days/
    • Read an interesting article on Yahoo finance which showed the majority of gains in the Nasdaq is down to the big 6 tech firms and without them there would have been no gain in the Nasdaq since 2016 and the majority of movement is down to the price of 6 companies. It would appear, in the search for dividend and profit everyone has opted to buy Amazon, Facebook, Apple, Alphabet, Microsoft and Netflix, as a herd reaction. No one has stopped to question whether they are over-bought at all, or if they may have questioned that premise, the thought would have been quickly cast asunder in the wake of evidence to the contrary (prices of the big 6 only bulldozing up). This may have lead to a false narrative, where we may consider everything is rosy in the garden of equities and everything  will all be alright soon, as long as the big 6 keep on growing, even if much other evidence suggests the contrary. Which it is. From employment to housing arrears, from relationships with allies and perceived foes to actual communal transmission of Covid 19. From stratospheric  Fed and govt debt to trade imbalance, from irrational exuberance to actually facing reality now. Instead of relentless optimism, relentless realism.  It would appear we are in for another week of exuberance. The sun is shining, people are out enjoying themselves and one could be forgiven for thinking the crisis is over and we can all go back to doing exactly what we were doing before this inconvenience struck. Reassessment can be inconvenient too. No one likes to be wrong, (though we often are). Least of all the Potus, who's principle motivation may not be the well being and good health of his people, more the well being of the economy, more specifically the price of equity. He encourages more exuberance even when evidence may suggest otherwise.  It is earnings season for equities, the reports, many of  which would make grim reading in more sober times, will be ignored for even the merest hint that the future will be brighter or it wont get any worse, from a reaction to Remdesivir (which appears to improve more than it harms, improves 9 harms 3...a litigation lawyers dream) to any glimmer of positive data.  Then one looks at the price of Tesla and realise the equity markets really have gone potty. Look at Tesla's numbers and its price makes no sense at all. Herd irrational exuberance in a nutshell. VW and Toyota p/e  far less than 10, now look at Tesla and you know its share price is on steroids and anything else the doctor will prescribe.  I recently drove to the New Forest to visit a good friend. It is normally a patience sapping experience, but left on Friday 7 pm and arrived at 9;10 pm in record breaking totally unbelievable 2 hours 10 minutes. In July. Normally, it takes at least 3 hours. Roads are still quiet. Which leads me to question again the premise of a "V" shaped recovery  and consider whether those that suggested a "V" shaped recovery actually have very poor hand writing and their version of a V more closely resembles a flattish tick or even a very sloppy W. I digress, the point being there has to come a time when the US has to take off its rose tinted glasses and see the reality of Now for what it is, rather than wishing it all away for a brighter tomorrow. Might not happen this week as equities push higher but you can't escape it forever. Can you?  
×
×