Potential Pull-back for BTC leading to Long Set-up (Near-term)
Updated
BTC has broken down from the widening channel we have been moving up in since the 4th of January. We need to hold $37600 (local support/supertrend) - $36200 (Macro Fib [2017 top/2018 bottom] 2. extension) or we could see a move down to the landing zone around $34000 where we have major support from what has been the top side trend line resistance for the majority of this run. We also have the 100 EMA and SMA here for added support and the volume POC.
However if that does not hold there is a slightly different trend line just below around $30000. There is a lot of confluence around here with the Weekly pivot point just above, the anchored VWAP taken from the first consolidation after we broke the 2017 ATH, and the POC (from consolidation after $28500 top) in-between those and the 200 EMA/SMA. Not sure where the next stop would be if these don't hold but with the amount of institutional buying right now the dumps may end up being bought up quickly and smaller then before.
There are no major divergences that suggest this area is very likely to break but its worth coving all possibilities to be prepared. The only thing I don't like is that the DI+ has been weakening this past leg $33800.
Depending on how these areas hold, it could be a good opportunity to go long in case this bull run continues, but at the same time having a look at some GlassNode metrics and it seems like we are getting close to a local top, but by no means an end of this cycle. Some metrics are close to extremes, so I have adjusted my risk management until we visit the weekly 21EMA. Who knows this run could keep going, my target is around the 2.618 at $46465 but it seemed a little crazy to put that on this chart.
However if that does not hold there is a slightly different trend line just below around $30000. There is a lot of confluence around here with the Weekly pivot point just above, the anchored VWAP taken from the first consolidation after we broke the 2017 ATH, and the POC (from consolidation after $28500 top) in-between those and the 200 EMA/SMA. Not sure where the next stop would be if these don't hold but with the amount of institutional buying right now the dumps may end up being bought up quickly and smaller then before.
There are no major divergences that suggest this area is very likely to break but its worth coving all possibilities to be prepared. The only thing I don't like is that the DI+ has been weakening this past leg $33800.
Depending on how these areas hold, it could be a good opportunity to go long in case this bull run continues, but at the same time having a look at some GlassNode metrics and it seems like we are getting close to a local top, but by no means an end of this cycle. Some metrics are close to extremes, so I have adjusted my risk management until we visit the weekly 21EMA. Who knows this run could keep going, my target is around the 2.618 at $46465 but it seemed a little crazy to put that on this chart.
Note
The trend lines come from here - Note
Secondary POC (from consolidation after $28500 top) - Note
The 4hr has closed under the $36700 level, there is a lack of volume between here and $35300, so a I am looking for a move to the landing zone with a bounce in the middle at $36200. Note
We also have macro fib levels at both of the highlights areas. The right hand fib is pulled from 2017 top to 2018 bottom and the right fib from 2019 top to covid dump bottom. Two golden ratio fibs (2.618 and 1.618) around the $30000 zone, and the 1.786 in the landing zone at $32684. Hopefully these add to the support but if we break the $30000 I will be looking at this as the correction that has been long over due. Note
We have bounced amazingly off the top of the top of the landing zone, so far more then 13% back up. Followed with a nice 2hr close above the $37600, which gives me the feeling this dump may be over for now. Before extending targets to new ATHs, I will be looking for a 4hr+ close above $41150.Note
I have changed my area to extend targets after looking at some higher TFs. I now think we need to break the ATH around $42000. Otherwise I will be looking for another move down, possibly further then before. We really need to keep moving up or we will break the parabolic curve.Parabolic Curve (Left = Linear / Right = Log) -
Note
4hr ADX is now printing a bearish trend, and we have been rejected from $39000, which we need to get above to turn momentum (stoch) to the upside. So another leg down looks likely but now how far down is question? Hopefully its more apparent in the morning. Note
We have continued the move down, with some long wicks on both the buy and sell side, which I see as mixed signals. The MACD is printing more downwards momentum then I can find anywhere in the past, even the 2017 dump from peak did not print these numbers (<12HR). ADX is still strong, DI+ has a negative slope while DI- is positive with a relatively aggressive angle. We are approaching a common reversal area for the ADX at the 50 mark, if we reach 50 at the same time as finding confluence of support, there is a chance this move down will come to an end. If my "Key Support" area does not hold I will be looking for a move down to $24000 (may take several days), but I will be taking a scalp position for potential bounce in the support box.
Note
Bounce played out amazingly. 10% :) Note
2 great almost 10% bounces now. I think the $33000 area above has become resistance and I think we might range between here for a while. One side will break sooner or later.Note
The Key Support zone has held for now and we back up 16%+. DI+ is positive again and Stoch will remain to the upside above £34000. For more upside I will look for the $34000 level to hold and we have to make a higher high on the next push. If we get a 4hr< close below $34000 or we rally to near the ATH but do not break it, I will be looking for a move down past the recent low.
Note
We could currently be forming a H&S with a target of $18200 if the neckline around $30000 breaks. Alternatively if we get above the upwards sloping trend line we could see another push up. Time to sit back and let this play out... Trade closed: target reached
The move down to the levels from the start of the idea has mostly played out. Something else is shaping up now.
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