BITCOIN | About The Red Triangle, Channels, Patterns!
Updated
Hi,
I don't even know where to start because I have so much to talk about. The simplest is to start from the beginning, right? :)
This will be quite a long post. A lot of bearishness inside of it because I cannot talk about long-term bullishness before I haven't seen any crucial signs. What are the bullish signs? I'll talk about that at the end of this post.
I have made several charts from different timeframes (TF) to talk about the current technical situation. So, let's start from the beginning.
As you can see the price has moved downwards since the 2019 high was made. Several lower highs (LH) and a couple of weeks ago new clear lower low (LL). About lower highs - those lower highs have printed super-strong trendline. Four to five attempts to break above of it has failed and the result is front of you right now. This lower low turns my mid- and even my long-term bias to completely bearish. As you have seen in my previous idea post, we can trade short-term bullish moves but in general, the Bitcoin price is under pretty heavy bearish pressure.
26. September candle, the powerful candle downwards, confirmed a breakout from the bearish chart pattern called "Descending Triangle". Usually, if the price makes a heavy breakout from the chart pattern, the price retests the breakout area and it will continue to the breakout direction. If the price starts to approach that retest area then here comes THE Red Triangle.
THE RED TRIANGLE: a possible mid-, long-term selling area.
The red triangle is the strongest resistance level that I haven't seen for a while. It doesn't mean that the price cannot go above of it but I know 100% (okay, I say 90% because it freaks you guys out but its a 100%) that this needs a hell of power and this will only occur whit powerful candle as it was 26. September! So, that's why I cannot be bullish before we haven't made a breakout above the red triangle.
The red triangle (strong resistance) consists of:
1. The fat light-blue trendline. Pulled from the 2019 high and as said previously, it has worked already 4-5 times as a resistance!
2. The horizontal light-blue support & resistance line. On the Daily timeframe, it has worked ~11 as a support or as a resistance. Obviously, it has worked more as a support level because it is one part of the Descending Triangle but most importantly, it matches perfectly with the prementioned trendline, a really powerful grossing area.
3. Descending Triangle retest. I talked about it previously but yes, the retest is more powerful because of the 26. September candle. It was really powerful and it shows that the area is really strong.
4. Fibonacci retracements. Pulled from different tops but the bottom is still the same. Around the red triangle stays three Fibonacci levels 38%, 50% and 62%.
5. The middle number $9,500. Not much but still in the list to add a bit strength to the marked area.
6. For the sixth, we have to open a new image:
We got a bounce from the $8,000. It was nicely predictable after the bullish Engulfing has formed on the Daily TF. What we got from there was a Double bottom on the Daily. Now, the Double Bottom chart pattern is activated (close above the neckline) and it is ready to climb to our marked area. Why I'm talking about it is the pattern target. I have marked those with orange arrows. From the bottom to the neckline and from the neckline to the target area = the same length. And what is interesting, the pattern target matching exactly with our marked red area - a possible reversal area!
7. As you see from the picture above, inside the red triangle are two lines. Let me introduce them - orange is EMA50 and blue is EMA100. They both should act as resistances and definitely they add strength to the potential reversal area.
8. EMA Death Cross between 50 & 100. The last time this happened was in March 2018 and you should know where the price landed. It is not the exact criterion but it confirms my bearish bias just like the next point.
9. Mid-term lower highs, plus new and fresh lower low!
10. As always, wait for bearish price action from the marked area (candlestick patterns, breakouts from chart patterns on the lower timeframes)
THE MAJOR TARGETS: Channels
If the price reaches to the marked area, if the bearish candlestick pattern occurs around of it and if the price drops, then it touches ~$6,000, at least!
The first parallel channel, upper line (light-blue) and the middle line (gray), is pointed to the 6k. This is just one criterion which is pointed to the mentioned area, there are more but in general, I can see that the price may reach, and actually pretty easily, to the $6,000!
Worst case scenario - the asphalt (parallel channel downwards, upper blue and lower black) can drive the price to the 2019 low. Definitely, too early to say but visually it looks nice on the chart ;)
CURRENT ACTION: 1-hour TF
The previous idea target was around $8,700. As said in the image above, I don't put those targets without a reason. 9 criteria were inside the orange target area. Why I want to point it out is the red trendline, which is also a short-term counter trendline. Watch out if it breaks, it may release the selling pressure sooner than expected because technically, it is capable to go lower from 8,700 (9 criteria) but I cannot call out a "short" because...it's a secret! ;)
The confirmed movement upwards should start after the breakout above the Bull Flag. Let's see, $8,350 - $8,400 has to hold the price.
Mid-, long-term bearish bias turns to bullish if the Daily candle smashes the marked red area and it gets a close above the trendline (around the super-light-green triangle) and above the super-strong horizontal resistance. Then I will start to look at what the price action starts to show me. Is it a fakeout? Do the price stays above the major counter-trendline. Yes, it is a counter-trendline which is pulled from 2019 high (fat blue line - channel upper trendline).
SUMMARY: At the moment, on the Daily TF, my eyes are pointed to the red triangle. As said, I haven't seen so powerful resistance for a while but it doesn't mean that I want to jump immediately to the trade, NO. I don't marry with this level, I'll wait for bearish price action and believe me, it will show us some footprints! Let the price action guide you into the trade!
If it was helpful then take a second and support my effort by hitting the "LIKE" button, it is my only fee from You!
Best regards,
Vaido
I don't even know where to start because I have so much to talk about. The simplest is to start from the beginning, right? :)
This will be quite a long post. A lot of bearishness inside of it because I cannot talk about long-term bullishness before I haven't seen any crucial signs. What are the bullish signs? I'll talk about that at the end of this post.
I have made several charts from different timeframes (TF) to talk about the current technical situation. So, let's start from the beginning.
As you can see the price has moved downwards since the 2019 high was made. Several lower highs (LH) and a couple of weeks ago new clear lower low (LL). About lower highs - those lower highs have printed super-strong trendline. Four to five attempts to break above of it has failed and the result is front of you right now. This lower low turns my mid- and even my long-term bias to completely bearish. As you have seen in my previous idea post, we can trade short-term bullish moves but in general, the Bitcoin price is under pretty heavy bearish pressure.
26. September candle, the powerful candle downwards, confirmed a breakout from the bearish chart pattern called "Descending Triangle". Usually, if the price makes a heavy breakout from the chart pattern, the price retests the breakout area and it will continue to the breakout direction. If the price starts to approach that retest area then here comes THE Red Triangle.
THE RED TRIANGLE: a possible mid-, long-term selling area.
The red triangle is the strongest resistance level that I haven't seen for a while. It doesn't mean that the price cannot go above of it but I know 100% (okay, I say 90% because it freaks you guys out but its a 100%) that this needs a hell of power and this will only occur whit powerful candle as it was 26. September! So, that's why I cannot be bullish before we haven't made a breakout above the red triangle.
The red triangle (strong resistance) consists of:
1. The fat light-blue trendline. Pulled from the 2019 high and as said previously, it has worked already 4-5 times as a resistance!
2. The horizontal light-blue support & resistance line. On the Daily timeframe, it has worked ~11 as a support or as a resistance. Obviously, it has worked more as a support level because it is one part of the Descending Triangle but most importantly, it matches perfectly with the prementioned trendline, a really powerful grossing area.
3. Descending Triangle retest. I talked about it previously but yes, the retest is more powerful because of the 26. September candle. It was really powerful and it shows that the area is really strong.
4. Fibonacci retracements. Pulled from different tops but the bottom is still the same. Around the red triangle stays three Fibonacci levels 38%, 50% and 62%.
5. The middle number $9,500. Not much but still in the list to add a bit strength to the marked area.
6. For the sixth, we have to open a new image:
We got a bounce from the $8,000. It was nicely predictable after the bullish Engulfing has formed on the Daily TF. What we got from there was a Double bottom on the Daily. Now, the Double Bottom chart pattern is activated (close above the neckline) and it is ready to climb to our marked area. Why I'm talking about it is the pattern target. I have marked those with orange arrows. From the bottom to the neckline and from the neckline to the target area = the same length. And what is interesting, the pattern target matching exactly with our marked red area - a possible reversal area!
7. As you see from the picture above, inside the red triangle are two lines. Let me introduce them - orange is EMA50 and blue is EMA100. They both should act as resistances and definitely they add strength to the potential reversal area.
8. EMA Death Cross between 50 & 100. The last time this happened was in March 2018 and you should know where the price landed. It is not the exact criterion but it confirms my bearish bias just like the next point.
9. Mid-term lower highs, plus new and fresh lower low!
10. As always, wait for bearish price action from the marked area (candlestick patterns, breakouts from chart patterns on the lower timeframes)
THE MAJOR TARGETS: Channels
If the price reaches to the marked area, if the bearish candlestick pattern occurs around of it and if the price drops, then it touches ~$6,000, at least!
The first parallel channel, upper line (light-blue) and the middle line (gray), is pointed to the 6k. This is just one criterion which is pointed to the mentioned area, there are more but in general, I can see that the price may reach, and actually pretty easily, to the $6,000!
Worst case scenario - the asphalt (parallel channel downwards, upper blue and lower black) can drive the price to the 2019 low. Definitely, too early to say but visually it looks nice on the chart ;)
CURRENT ACTION: 1-hour TF
The previous idea target was around $8,700. As said in the image above, I don't put those targets without a reason. 9 criteria were inside the orange target area. Why I want to point it out is the red trendline, which is also a short-term counter trendline. Watch out if it breaks, it may release the selling pressure sooner than expected because technically, it is capable to go lower from 8,700 (9 criteria) but I cannot call out a "short" because...it's a secret! ;)
The confirmed movement upwards should start after the breakout above the Bull Flag. Let's see, $8,350 - $8,400 has to hold the price.
Mid-, long-term bearish bias turns to bullish if the Daily candle smashes the marked red area and it gets a close above the trendline (around the super-light-green triangle) and above the super-strong horizontal resistance. Then I will start to look at what the price action starts to show me. Is it a fakeout? Do the price stays above the major counter-trendline. Yes, it is a counter-trendline which is pulled from 2019 high (fat blue line - channel upper trendline).
SUMMARY: At the moment, on the Daily TF, my eyes are pointed to the red triangle. As said, I haven't seen so powerful resistance for a while but it doesn't mean that I want to jump immediately to the trade, NO. I don't marry with this level, I'll wait for bearish price action and believe me, it will show us some footprints! Let the price action guide you into the trade!
If it was helpful then take a second and support my effort by hitting the "LIKE" button, it is my only fee from You!
Best regards,
Vaido
Note
BTC/USD - New possible short-term scenario:
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