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
      11,906
    • Total Posts
      60,284
    • Total Members
      80,171
    Newest Member
    KernowTrader
    Joined 08/08/20 10:55
  • Posts

    • This is my 2% swing file on the FTSE100 Index: Thought I'd show this as its messy! As you can SEE - there are multiple 2 higher lows that just did NOT work for one reason or another - this is why money management is crucial However, when it did work - the results were (profit target of 240pts, stop of 25 pts = 9.6R) If 1R = 2% of account then you're up 19% in 4 trading days Now the smart ones of you, will be asking yourself "How often does this happen in a YEAR on a DAILY chart?"  The answer is go and look - This is the water, I've led you to it, it's now up to those that want to win at this game to investigate Oh and YES, there are many more ultra simple trading methods in a year on a daily chart with these sorts of R profit value returns - the SP500, Nasdaq100, FTSE250, FTSE100, EURUSD etc etc etc all produce OPPORTUNITIES per year that return you 100%+ and nearer 300% PER market - Nothing more than a swing file on your charts! NO Indicators, No Moving Averages, just RAW price action I think for this thread I'll leave it there - If you can't prosper with these ultra simple methods then you're doing something massively wrong and if you go back and check the rules to success that i started this thread with, you'll be messing up on 1 or more of them - REVISIT them and learn them The one thing i will say is "To win big in the markets, you have to do what most others aren't doing - WD Gann showed me in his works the 2 Higher Lows / Lower Highs trade set-up, he wrote about it 100+ years ago! Along with many others that produce mega returns from the markets - I'm willing to bet very little is published out there on this subject" If you go down the Gann route - contact me - it is fraught with bad information and works, this is because people devote a lot of years to researching Gann and when they get to the end and realise they can't work it out they still publish the sub-standard work they have been researching, which then clogs up the trading literature world and after reading 10 so called Gann books and getting nowhere people then form the opinion that Gann is a load of tosh - I was one of those people back in early 2010's, then I did something most others wouldn't bother doing, I decided to research and discount it all myself I can tell you for a FACT: That Gann angles WORK  Time Cycles WORK Price Retracement and Expansion ratios WORK But only if you use them correctly, in the right context and conditions Why did the SP500 Index stop dead in March 2009 @ 666pts?  Back in the 1900's WD Gann wrote of the "Gravity Centre" or the 50% level - there lies the answer Good luck on your trading journey, most f you are going to fail because you're not applying the keys/rules to success - this is another fact. Here's a little bonus material Gann Angles chart for you If you KNOW the Time Cycle date and a simple Gann 1x1 angle falls onto THAT date (to the day) then you can be quietly confident that price is going to reach said 1x1 Gann angle within a few days of the date! The KEY is knowing Time Cycle dates - the ones above AREN'T the Time Cycles Gann mentions in his works THT
    • Here's another 2 LOWER highs
    • Simply basic price patterns can make you an absolute fortune in this game - look at the one above on GOLD! This is 100% why I advocate using swing files - you get to see the market in a different perspective  The chart is UK: WWH - the spread is way to wide to trade this  The 2 high Lows trade to the left of the chart, worked, but you'd of broken even on the trade at worst - This is WHY money management is crucial in this game! There's nothing special to this trading method - It's also an Elliott Wave (EW) method too, but often if you employ strict EW rules you wouldn't take the trade. TIP: If you have software that can search for Elliott Waves, then set it to look for Wave 4's  the blue W4 box on my software tells me that price is in the perfect price AND time zone for a EW 4 If price CLOSES below the #3 low then it would CONFIRM a bearish swing low  For simplicity all we want is for price to validate the trade by trading LOWER than #3 and we'd be in the trade Again simple money management rules - Stop = 25% of the 50 period ATR (20pts) / once up 2 x risk (40pts) stop goes to break-even +0.1 to ensure some sort of profit and then protect 40% of any open profit  Opportunity, excellent R profit potential, excellent risk management = As good as it gets, doesn't guarantee a wining trade though  
×
×