Bitcoin Again in Distribution Zone? Part 2
Updated
From my previous analysis:
In my previous analysis i showed some similarities with the 10K high from 2 months ago. Now 2 days later we can see those similarities are still there, at the moment making it even more clear about where we might be. Now a lot will depend on how the stock market moves. There we can see for the Dow that it has reached the support of the big bearish wedge wedge it has moved inside of the past weeks. So if we would see it hang above that support the coming day(s), Bitcoin could make that channel as well the coming day or 2. If so, we would have an identical pattern as 2 months ago. Now i wish i could say that it would then continue to do the same, but past year or so, fractals have become a bit unreliable, while in 2018 they were magical.
Well so far this fractal has been magical as well :), but of course not completed yet! Just posting this message again just to show how having a plan/scenario upfront can be super helpful to stay objective and remain calm because you have a good idea of what might be going on. It also helps to filter some fake signs as well. Like 2 days ago i updated on that first strong move up up to 6900ish:
So looks like the fractal is in play (the one on the right from the previous update. There is however a difference, the upwards movement (yellow circle), is moving steeper than 2 months ago. That is in favor of bulls normally. We can also see a fight the past 2/3 hours with some zig zag movement between 6820/6920.
But as mentioned in the previous analysis, if the channel breaks on the upside, i will consider the fractal as invalid, but won't take it off the table completely. But if we would see a move down coming hours to 6700/6750, could mean the fractal is in play.
There is also another good (bearish option), which i described earlier today, It's where i drew that H&S. I have noticed many people consider the neckline has been broken already, but i simply didn't like that H&S, i wanted to see a bigger right shoulder, and this could be it if we hang between 6750/6950 for another half day or so and then start to drop (look at the chart above)
Of course it's never this easy, wish it was :). But to me personally, if we would have seen a move up above 6950/7000 within a few hours after i updated this chart above, i would have stepped away from my H&S view and maybe even my (short term) bearish view. Let's just call it luck that it stayed within the range, below the resistance.
Also from previous analysis:
Now think for the H&S, the high should have been set now. So for the right shoulder, ideally we see something like the blue line on the right from now on. If we see a sharp move up above 6950ish, the fractal might also still be in play up until like 7050, but would be guessing then. Think bears don't wanna see it break above 6950ish from now on.
Now message from all of this is simple. The ones who have traded at least for a while, have learned, all we can do is try to make more profit than losses, because we will make losses. To become a better trader and more profitable, all you can do is try to make the losses smaller and/or less loosing trades and on the other hand improve the winners, the profit amount and the number of winners. I strongly believe, from my own experience, the way to do that is to have always have a plan. Have a plan on almost each time frame, from the monthly up to the 15min chart. What helps a lot, if you could match a view of the 1H and 4H with the weekly chart for example. I will try to make a small educational post on this later today, otherwise this analysis will become too big :).
Back to Bitcoin. As i just updated in public channel: To be clear, it's not done yet (the H&S), 6600ish still has not been reached, which means it could still turn into a bear trap. So as long as we don't touch 6600/6550, it can still be dangerous for the bears. I will write a new analysis now, but always takes a while, but wanted to say this up front
So bears can NOT celebrate yet, this is a typical trap zone around 6700, something Bitcoin loves to do. Ideally we stay below the 6800ish from now on, but think the real max is 6880ish. As long as we stay below this zone, the H&S is in play. On the left we can see the fractal is also still in play. Two months ago it hanged a bit and was making like a bear flag before it really started to drop AND before the selling volume increased significantly. As we can see, when it broke that channel around 9800, up until 9200 volume was very low, only at that drop in the green we can see that volume really increased! I remember that period between 9800 and 9200 very well, because it was confusing as hell. With OI increasing very big with low volume (suggesting accumulation from bulls), as mentioned in previous analysis, how whales have been playing tricks with the OI level, artificially increasing it!
Anyway, to keep it simple for now, price should stay below 6800ish from now on with a max of 6880ish. Now if we see a touch of 6600/6550, there is still room for a small bounce (like 6700/6750), but no more (normally). Because this time we have an H&S, which we didn't have 2 months ago, i rather NOT see low volume during the first part of the drop like we had then. Would prefer to see high volume when that big level breaks.
As you can see on the right, we have a very big support zone around 5800, similar to the 9200 2 months ago (where volume increased after the 9100 broke). I think this 5800ish might be the key level between a big bear market for the coming months (or longer) or that this potential drop is simply a move to create a higher low and we go up the coming weeks/months.
So tried to keep it as simple as possible and with only a view variables (scenario's), which is possible because of the small range we have between 6600/6880. I won't adjust/change it up until we see a real move in/outside of this range. So the red line on the right is the bearish/H&S version, the blue line is what could happen if we don't touch the 6600ish and make a bear trap H&S (higher low at 6700ish).
Please don't forget to like if you appreciate this :)
Previous analysis:
In my previous analysis i showed some similarities with the 10K high from 2 months ago. Now 2 days later we can see those similarities are still there, at the moment making it even more clear about where we might be. Now a lot will depend on how the stock market moves. There we can see for the Dow that it has reached the support of the big bearish wedge wedge it has moved inside of the past weeks. So if we would see it hang above that support the coming day(s), Bitcoin could make that channel as well the coming day or 2. If so, we would have an identical pattern as 2 months ago. Now i wish i could say that it would then continue to do the same, but past year or so, fractals have become a bit unreliable, while in 2018 they were magical.
Well so far this fractal has been magical as well :), but of course not completed yet! Just posting this message again just to show how having a plan/scenario upfront can be super helpful to stay objective and remain calm because you have a good idea of what might be going on. It also helps to filter some fake signs as well. Like 2 days ago i updated on that first strong move up up to 6900ish:
So looks like the fractal is in play (the one on the right from the previous update. There is however a difference, the upwards movement (yellow circle), is moving steeper than 2 months ago. That is in favor of bulls normally. We can also see a fight the past 2/3 hours with some zig zag movement between 6820/6920.
But as mentioned in the previous analysis, if the channel breaks on the upside, i will consider the fractal as invalid, but won't take it off the table completely. But if we would see a move down coming hours to 6700/6750, could mean the fractal is in play.
There is also another good (bearish option), which i described earlier today, It's where i drew that H&S. I have noticed many people consider the neckline has been broken already, but i simply didn't like that H&S, i wanted to see a bigger right shoulder, and this could be it if we hang between 6750/6950 for another half day or so and then start to drop (look at the chart above)
Of course it's never this easy, wish it was :). But to me personally, if we would have seen a move up above 6950/7000 within a few hours after i updated this chart above, i would have stepped away from my H&S view and maybe even my (short term) bearish view. Let's just call it luck that it stayed within the range, below the resistance.
Also from previous analysis:
Now think for the H&S, the high should have been set now. So for the right shoulder, ideally we see something like the blue line on the right from now on. If we see a sharp move up above 6950ish, the fractal might also still be in play up until like 7050, but would be guessing then. Think bears don't wanna see it break above 6950ish from now on.
Now message from all of this is simple. The ones who have traded at least for a while, have learned, all we can do is try to make more profit than losses, because we will make losses. To become a better trader and more profitable, all you can do is try to make the losses smaller and/or less loosing trades and on the other hand improve the winners, the profit amount and the number of winners. I strongly believe, from my own experience, the way to do that is to have always have a plan. Have a plan on almost each time frame, from the monthly up to the 15min chart. What helps a lot, if you could match a view of the 1H and 4H with the weekly chart for example. I will try to make a small educational post on this later today, otherwise this analysis will become too big :).
Back to Bitcoin. As i just updated in public channel: To be clear, it's not done yet (the H&S), 6600ish still has not been reached, which means it could still turn into a bear trap. So as long as we don't touch 6600/6550, it can still be dangerous for the bears. I will write a new analysis now, but always takes a while, but wanted to say this up front
So bears can NOT celebrate yet, this is a typical trap zone around 6700, something Bitcoin loves to do. Ideally we stay below the 6800ish from now on, but think the real max is 6880ish. As long as we stay below this zone, the H&S is in play. On the left we can see the fractal is also still in play. Two months ago it hanged a bit and was making like a bear flag before it really started to drop AND before the selling volume increased significantly. As we can see, when it broke that channel around 9800, up until 9200 volume was very low, only at that drop in the green we can see that volume really increased! I remember that period between 9800 and 9200 very well, because it was confusing as hell. With OI increasing very big with low volume (suggesting accumulation from bulls), as mentioned in previous analysis, how whales have been playing tricks with the OI level, artificially increasing it!
Anyway, to keep it simple for now, price should stay below 6800ish from now on with a max of 6880ish. Now if we see a touch of 6600/6550, there is still room for a small bounce (like 6700/6750), but no more (normally). Because this time we have an H&S, which we didn't have 2 months ago, i rather NOT see low volume during the first part of the drop like we had then. Would prefer to see high volume when that big level breaks.
As you can see on the right, we have a very big support zone around 5800, similar to the 9200 2 months ago (where volume increased after the 9100 broke). I think this 5800ish might be the key level between a big bear market for the coming months (or longer) or that this potential drop is simply a move to create a higher low and we go up the coming weeks/months.
So tried to keep it as simple as possible and with only a view variables (scenario's), which is possible because of the small range we have between 6600/6880. I won't adjust/change it up until we see a real move in/outside of this range. So the red line on the right is the bearish/H&S version, the blue line is what could happen if we don't touch the 6600ish and make a bear trap H&S (higher low at 6700ish).
Please don't forget to like if you appreciate this :)
Previous analysis:
Note
H&S and fractal in full play. Usually with Bitcoin, when a big support would break we would see a big move, not giving anyone a chance to get in anymore. I remember i was thinking (and saying) the same thing 2 months ago when that big support around 9400/500 broke (similar to the current 6600ish. So even this is the same as back then. Because normally with bitcoin, when it doesnt make a big drop, it's usually a sign that something else might be going on. But because the fractal played out so perfectly until now, i don't see a reason to change my view here. According to the fractal (and the H&S), we can not bet above 6600ish anymore. Maybe a bit of room until like 6650ish, but more than that would make everything shaky.
Note
Well, i am at least glad i did that last update before i went to sleep. The drop was simply too small and volume also wasn't what it should have been. But as mentioned in previous update, was bit similar 2 months ago, which got me on the wrong foot. But at least we had that easy neckline of 6600 with margin to 6650. Now in hindsight, its clear it was never a H&S, but it was a channel. Should have known that, saw a few alts who were moving inside that same channel, but others were more bearish, so chose to acknowledge it as noise and just keep the 6600/50 as a max pull back.
Now we can see, that Bitcoin is much less correlated to the stock market. It pumped on its own yesterday and Dow has been dumping past half hour and Bitcoin is dropping, but barely so far. So maybe that's the positive news here.
For now, i don't have any real signs to go on, to say we are going to drop. Of course, nothing really has changed so far (the reasons why i am/was bearish), but at the moment, there is still a chance this turns into a bull flag. Volume is high on the move up which is bullish. As long as 6880/6900 holds, it could turn into this bull flag. Think there is even room up to 6800ish and make a higher low.
That's why i can't give a clear direction on what is next. I have to sit this out a little bit and see what happens the coming hours or day or so. So from clearly bearish past week, now i am slightly bearish. Just as i mentioned in my first analysis week ago, i now 1 thing for sure, i am NOT going to long here. To many weak signs still on the big picture for me.
Note
I completely forgot to mention the daily candle. As we can see here on the right, a very similar move as 2 weeks ago (yellow circle). Now objectively, if today's candle closes above 6940ish, it would be a buy signal. Now the higher it would close, the stronger the signal. In theory it could close around 6880/900 as well (same level as mentioned above), but then it would be a bit shaky. So think above 6940ish, we should see some follow through, doesnt mean a big rally, but some follow through up is likely. Note
Now have no idea if this is something real or not, but the markets first response at least that it could be something. Don't think it will change a lot, actually mean don't think world economies will be back where they were 3 months ago (we were already headed towards a contraction even before Corona), but stock markets don't always follow logic. Anyway, Dow is up almost 1000 points and still holding. The real answer will be when the US markets open (maybe even when Europe opens). But obviously this could be a game changer on market views and since Bitcoin followed the stock market quite closely, maybe as well for crypto. Just can't say, think would need at least a day to see how both market will respond to this. In the mean time, going to watch it from the sidelines, because no idea if this will give a relief and if so, how big.
Should not forget, this is not the first so called cure, that's why i think having at least a day (since it's Friday tomorrow), maybe the weekend as well to see how markets will react on Monday. Think everyone by now will hope it's something real, because i think even the biggest bears, are prob fed up with the lock downs and the change in life we are experiencing here
cnbc.com/2020/04/16/sp-500-etf-jumps-2percent-after-hours-on-report-gilead-drug-showing-effectiveness-treating-coronavirus.html
Note
New analysis Bitcoin:
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.