BTC/Euro 7/21/2020
Updated
Hello and welcome to this analysis on BTC/Euro.
BTC has been in a very boring sideways range since the 7th of May. I choose to show the Euro pair because I believe the price action is much more visible on this pair compared to the USD pair.
Looking at the consolidation on the daily chart, the price has been making series of lower highs other than the fake-out at first of Jun that price broke above its diagonal resistant but couldn't manage to hold above it and instead it got smashed back down on high volume. looking at the bottom of the range, the price has consistently tapped the horizontal support at 7900 but each bounce from the support got shorter, and at the moment it is consolidating on the support. Support and resistance tend to become weaker the more price tests them. Also, the failure to make any higher high after almost 3 months of consolidation and resting on the support is a sign of weakness and distribution. The technical formations that I mentioned are describing a classic descending triangle which is usually a bearish pattern and can act as a topping formation. The target of the pattern is at 6660 Euro if price breaks below 7900 and don't manage to regain it back.
Looking at the volume you can see it has been falling since price topped at 9200 back at may and it has almost dried up. Also looking at the BBW at the bottom which is a volatility indicator you can see it has been going down and is resting at its historical lows at the moment. These 2 indicators are telling us that a very big move is likely to happen soon and they also confirm the deciding triangle pattern. BTC tends to trend for a while and move between 20 to 30% after it breaks 3 or more months-long consolidations while its volatility metrics are at the historical lows.
There is not any major horizontal support below the formation from 7900 till 6900. As you can see on the volume profile there is a volume gap in that price range. So the price can rapidly move down if it breaks below the formation. Also, there should be a lot of stop losses and liquidations below the support that will get triggered and push the price lower if it breaks the 7900 support.
These technical formations suggest a 15-20% drop in the price in the coming days as long as price doesn't manage to make a higher high above 9350 and break above the diagonal resistance of the formation.
Hope you enjoyed this analysis, good luck trading. :)
BTC has been in a very boring sideways range since the 7th of May. I choose to show the Euro pair because I believe the price action is much more visible on this pair compared to the USD pair.
Looking at the consolidation on the daily chart, the price has been making series of lower highs other than the fake-out at first of Jun that price broke above its diagonal resistant but couldn't manage to hold above it and instead it got smashed back down on high volume. looking at the bottom of the range, the price has consistently tapped the horizontal support at 7900 but each bounce from the support got shorter, and at the moment it is consolidating on the support. Support and resistance tend to become weaker the more price tests them. Also, the failure to make any higher high after almost 3 months of consolidation and resting on the support is a sign of weakness and distribution. The technical formations that I mentioned are describing a classic descending triangle which is usually a bearish pattern and can act as a topping formation. The target of the pattern is at 6660 Euro if price breaks below 7900 and don't manage to regain it back.
Looking at the volume you can see it has been falling since price topped at 9200 back at may and it has almost dried up. Also looking at the BBW at the bottom which is a volatility indicator you can see it has been going down and is resting at its historical lows at the moment. These 2 indicators are telling us that a very big move is likely to happen soon and they also confirm the deciding triangle pattern. BTC tends to trend for a while and move between 20 to 30% after it breaks 3 or more months-long consolidations while its volatility metrics are at the historical lows.
There is not any major horizontal support below the formation from 7900 till 6900. As you can see on the volume profile there is a volume gap in that price range. So the price can rapidly move down if it breaks below the formation. Also, there should be a lot of stop losses and liquidations below the support that will get triggered and push the price lower if it breaks the 7900 support.
These technical formations suggest a 15-20% drop in the price in the coming days as long as price doesn't manage to make a higher high above 9350 and break above the diagonal resistance of the formation.
Hope you enjoyed this analysis, good luck trading. :)
Note
I highly recommend waiting for a break out first before entering this trade. Patterns can go both ways. Although this pattern is more likely to break to the downside but there is still a chance for it to break up. Anyways I expect a massive move to happen soon due to the volatility metrics to any side that the pattern breaks.Note
The only objection to this analysis is the Alt-coin market. They are disagreeing with the BTC chart and some of them look really bullish.Note
Note
Since I uploaded the first post, the market has started to look more bullish than it used to. As I mentioned the Alt-coin market looked strong back then which made me a bit skeptical about the bearish outcome of the patter. Most of the Alt-coins especially Etherium had a bullish break out of their consolidations since my last post. As I've posted before Etherum has been looking very good recently. Back to the BTC chart, It seems like the price is trying to complete a double bottom pattern inside the triangle which gets confirmed if price breaks above 8360. As you can see the upper band of the Bollinger bands is also there as well which means the volatility may expand if price break that level. If price breaks above the level, it will be the first higher low and higher high since May and it will confirm a break out of the defending triangle.
If the price breaks the triangle to the upside, the target will be around 10500 Euro.
Note
Note
Looking at the USD pair, the price action looks much more bullish compare to the Euro pair. It has already broken out of a double bottom pattern and it seems like its holding the neckline as support at the moment. Also, the bigger picture looks more bullish as you can see the price has made higher lows since the 18th of May and it looks like it is trying to make an ascending triangle which is a bullish pattern. The pattern confirms if price breaks above 10K and its target will be around 11500$.
It is very important to see volume increase as price breaks the important levels that I mentioned to confirm a break-out and start of a new trending move.
The difference between the Euro chart and the USD chart is because the USD has been very weak recently and the Euro has been stronger. If you look at the Euro/USD chart you can see that Euro has been massively outperforming USD. Hence the price of BTC looks more bullish against the USD compared to the Euro chart while it was going sideways.
Note
Note
Very good price action so far.The price squeezed up as soon as it broke above the triangle and the double bottoms neckline (the red line).
Looking at the Bolinger Bands you can see that the bands are spreading from each it means the volatility is expanding.
The volume is a bit low. Although it is higher than yesterday's volume only 11 hours in the day, it is nothing to write home about yet. I would like to see volume increase a lot more to confirm that it is a legit breakout.
Note
The target of the triangle to the upside is around 10500 Euros.Note
Note
Looking at the USD pair we can see the same story. The price has reached the target of the double bottom pattern and it looks like it is breaking above the ascending triangle as well.
You can see the BBW indicator has jumped up from 0.03 that shows the volatility is increasing from the historical lows.
Volume is a bit lack lackluster for a legit breakout but there are 12 hours left from the day for volume to come in.
The target of the triangle is around 11500$ as long is it doesn't break below 9500$.
Note
Also, the Tade idea on the Euro pair is valid as long as it stays above 8200 Euro.Note
Note
Yesterday close wasn't really good. But today's candle looks much better already, it is already trading above yesterday's high so it is a follow-through day and volume looks much better it is almost half of yesterday's volume only 6 hours in the day. Overall the market looks good for continuation.
Note
Note
Same story on the Euro chart.Trade closed: target reached
Note
Note
Excellent follow-through!Volume finally came in, as you can see yesterdays volume is standing out and is much higher compared to the days before it. This is a sign of a good break out. Usually, break out volumes are a sign for the start of a new trending move.
The price has already hit a few of the targets that I've mentioned before. It might be a good place to take some profit off the table but I expect the price to go higher over time.
Gonna update BTC on a separate post. :)
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.