Bitcoin - Short Term: Can It Escape The Downtrend?
Updated
Haven't done one of these short term Bitcoin updates in a while. We're in a really interesting situation right now. We got rejected at the last possible downtrend since June, and we're currently consolidating just above 9.1K, which was the descending triangle support from this past summer...in yet ANOTHER descending triangle. Buying volume has basically failed to eclipse sell volume, so we have our main support flat, just above 9K and the 200 Day Moving Average.
There are three possibilities I'm looking at. In green, you can see that we would break out of this triangle to the upside and blast through the descending resistance (orange). This would leave a lot of buyers in the dust yet again. Unfortunately, volume isn't telling me that this is the more likely scenario (yet), though things can change at any moment. It doesn't seem like natural demand is causing a slow increase in price here. What I'm leaning towards is something more like the yellow scenario, if we're going to see continued price appreciation into November. What that means is that I think we may need some sort of liquidity hunt to attract buying interest in the $8400-8800 zone. A lot of traders would likely unload their positions on another beak below the 200d MA and even moreso below $8800. As you can see in pink, the $8400-8700 zone has been pretty important over the last several weeks. I think it would be the perfect place to corner the market and cause a higher volume bounce. Right now, volume continues to decline across the board.
Several alts remain in what one could consider bull flags (NEO, ONT, TRX, and VET in particular), but the higher cap alts are still fairly neutral, if still slightly bullish. Those coins I just mentioned have started to move up again in sat value, so perhaps they can withstand a Bitcoin drop towards $8700 and remain in bullish consolidation.
Marked on this chart are also the important $9100 support level and the $9600 resistance. I think for a more clear long signal, we will need to close above $9600 and this last possible resistance for the downtrend since June. And this will need to be accompanied by a high volume move. Once that clears, we can move on to test
12K-13K, but I don't think it would be cracked as easily as many traders might be expecting. Instead, I think we may end up seeing something like what happened at the end of 2015, except on a larger scale. What's really interesting is that if bulls can start to gain control here and invalidate the short-term descending triangle, we might not even close the $8800 gap until AFTER we retest $12-13K. Something like this: 
On the bearish side of things (red scenario), we'd fail to hold the 200 hourly MA and the $8400-8700 support zone, only to head back to the lows, and potentially to the bottom of the bearish channel. What we really want to see is buying volume/interest start to outpace sellers, which we are not seeing yet at this time.
This is not financial advice. This is just what I'm seeing in the short term. This is my opinion only. If one is going to make a financial decision, they should consult a professional and do their own research, using proper risk management.
There are three possibilities I'm looking at. In green, you can see that we would break out of this triangle to the upside and blast through the descending resistance (orange). This would leave a lot of buyers in the dust yet again. Unfortunately, volume isn't telling me that this is the more likely scenario (yet), though things can change at any moment. It doesn't seem like natural demand is causing a slow increase in price here. What I'm leaning towards is something more like the yellow scenario, if we're going to see continued price appreciation into November. What that means is that I think we may need some sort of liquidity hunt to attract buying interest in the $8400-8800 zone. A lot of traders would likely unload their positions on another beak below the 200d MA and even moreso below $8800. As you can see in pink, the $8400-8700 zone has been pretty important over the last several weeks. I think it would be the perfect place to corner the market and cause a higher volume bounce. Right now, volume continues to decline across the board.
Several alts remain in what one could consider bull flags (NEO, ONT, TRX, and VET in particular), but the higher cap alts are still fairly neutral, if still slightly bullish. Those coins I just mentioned have started to move up again in sat value, so perhaps they can withstand a Bitcoin drop towards $8700 and remain in bullish consolidation.
Marked on this chart are also the important $9100 support level and the $9600 resistance. I think for a more clear long signal, we will need to close above $9600 and this last possible resistance for the downtrend since June. And this will need to be accompanied by a high volume move. Once that clears, we can move on to test
12K-13K, but I don't think it would be cracked as easily as many traders might be expecting. Instead, I think we may end up seeing something like what happened at the end of 2015, except on a larger scale. What's really interesting is that if bulls can start to gain control here and invalidate the short-term descending triangle, we might not even close the $8800 gap until AFTER we retest $12-13K. Something like this: On the bearish side of things (red scenario), we'd fail to hold the 200 hourly MA and the $8400-8700 support zone, only to head back to the lows, and potentially to the bottom of the bearish channel. What we really want to see is buying volume/interest start to outpace sellers, which we are not seeing yet at this time.
This is not financial advice. This is just what I'm seeing in the short term. This is my opinion only. If one is going to make a financial decision, they should consult a professional and do their own research, using proper risk management.
Note
Volume has really dropped off. It's actually starting to become slightly more likely that we break the downtrend without having to go too much lower. Sell volume is starting to die out too, and as soon as buy volume starts to gain strength, we can look for the beginning of the next impulse. We have to see which resolves first: The flag within the triangle, or the triangle itself. Note
We're out of the triangle and testing it as support. No volume follow-through yet, and some alts actually have gone LOWER in USD value on this bounce, so I don't trust it quite yet. It'll be interesting to see how the monthly closes, regardless. Note
Rejected right at the $9600 resistance. We really need to see follow through buy volume to take us above the downtrend, otherwise this can result in a bart move, particularly if we head straight back down. Note
Really not much to say, except that we're still consolidating above the 200d MA and below the 100d MA. The recent moves are actually following my speculative squiggle pretty nicely. If my estimate happened to be correct, we'd break out of consolidation within the next couple of days. Note
Well, my original hunch played out, and we've tested slightly lower levels. I said I thought that was more likely in my recent video. Hard to update all of my charts at once. We haven't seen much of a bounce here either, though we're holding the 4H 200 MA, which is something. Perhaps we'd need to test the next level, around $8400 before we have a better chance of moving up and breaking the downtrend. This will be my last update on this chart until we break out or break down. 
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