Short

One more swing low for BTC

Updated

I've been a bit of a bear over the past couple of months. I was a little premature 3 weeks back when I said

Is the BTC bear over? I don't think so; a retest of 6k in play.

which is why I haven't posted again until now, but I am pretty confident we are going to see the lows once more.

The setup on the daily, when viewed in log, is in a broadening descending wedge and a descending wedge in linear. These are still both bullish setups at the macro timeframes, but they mean some short term pain.

The targets
* A retest of the prior low $5900 - 6700, setting up a nice double bottom.
* If that fails to hold, a new low between $3200 - $4300.

If this plays out, then I'd be extremely confident the bottom was in and another bull run would be eminent.

I'd love to hear your thoughts.

Note

As a trader you want to try to avoid being wrong longer than you have to be. It's costly and painful! So here are some key areas we should look for the original idea to be invalidated:

1. Obviously if we bounce here on the 38.2 fib, and make a new high, then most likely the idea is invalidated. There's a caveat here, but I'll explain if this eventuates.
2. If we bounce and make a new high at the 50 "fib" then that is a strong sign. Corrections often retrace to 50% of the prior swing high, so this is where we need to pay close attention.
3. The last stand is the 61.8. There was a fair bit of resistance here on the way up ie. 8k - 8.8k.

We must keep a close eye on those scenarios. But, if the 61.8 is taken out, it's almost a foregone conclusion that 6k will be retested. I expect to see a lot of buying here again and a bounce to 7.2k - 8k would be my target for a scalp long trade. I believe we will then make a lower low into the 5k range, and potentially the 4k range

Cheers

Note

We have had a strong bounce over the past the past day from the 38.2. As I said in my last update, we need to make a new high now for the down trend to be invalidated. Something to the effect of:

Note

We are in a crucial spot for BTC right now.

On the 1hr, we have a rising wedge and significant bear divergence on the RSI:

However on the 4hr and 1D, we have a very large inverse head and shoulders:

For the latter to come to fruition, BTC needs to impulse with some force through the neckline (11.6k) which also happens to be the 38.2 fib.

Note

We had a couple days of uncertainty, but it is looking more and more likely that the inverted h&s will play out. Again, above a daily close of around 11.5k - 11.6k and I'm going to close this trade/idea.

Note

Today's price action, in my opinion, has rejected the IH&S. Instead of breaking through the neckline with strong volume, price and volume have declined.

We have now made a lower high from the previous swing and the buyers are no where to be found.

There are a couple of spots where BTC may find support:
* 20EMA; unlikely in my opinion
* 50MA + 50% fib: a strong bounce here would be a very good sign.
* 200MA: I think this is the most likely at the moment.

If we make it down to the 200MA, the game is certainly still bearish.

Note

In my last update it did the exact thing I didn't think it would; bounce from the 20EMA. However, it wasn't enough to hold it this time:

Note

We made a big rising wedge, as previously noted, and broke down with some volume. Look for those key areas I've labelled above.

I am keeping an eye on the 4hr 200MA since if it is broken, our bearish scenario is still in play. If we get a strong bounce from the 50% fib, I would be looking for a long entry.

Note

That played out nicely:

I expect a 1-3 candle bounce on the 4hr, then potentially more downside. I'll provide an update in ~8hrs.

Note

So we didn't get much of a bounce, and instead we formed a bear pennant on the 1hr. I'm expecting 8.6k is now the next support zone:

Note

We smashed through the 4HR 200MA, and now we are supported by the 1D 200MA:

If the 1D 200MA doesn't hold, we may be in for a bigger drop than I originally anticipated:

If we use a rising wedge, and measure the pole, it places us in the <3k range. This may seem like a big stretch, but it's in play if the 200 doesn't hold. I will open a short trade if we close below the 200MA.

Note

I will be looking for a short entry on a lower TF since we closed below the 1D 200MA.

We found strong support at the 200MA previously, but in a down trend, every time you test support, it becomes weaker.

I am thinking something like this will play out; 3 more days of down to give us a 9 on TD. We will likely go back up to the 200MA to test for resistance. And I believe it will likely fail to break above and make a lower low.

Note

We spent a few days flirting with the 200MA, but the longer you sit on support in a down trend, the greater the risk of a big sell off:

I believe we will likely see ~6.4k within the next day or so. We should see a bit of a bounce at the 50% fib, then continue lower after it's rejected at either the 200MA or the 38.2 fib.

Hold tight, there's more low to come.

Note

We have started to form a little bear pennant on the 1HR that has a target of 6.4k - 6.8k, which is the same target as the larger bear flag:

I think we get there over the next ~24-36hrs

Note

Our pennant had a fake breakout which formed a bear flag instead:

Watch for a break below 8k to confirm, or a break above ~9k to invalidate

Note

As suspected, we broke down:

We reached a TD9 on the hourly, and now we are in a 2-4 candle bounce, before we begin the next leg down.

Note

The continuation of this idea can be found here:

I become death, the destroyer of worlds; BTC to $3k

crimsonronin

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