BITCOIN - BEAR FLAG ON THE HOURLY - EXPECT MORE DOWNSIDE
The market sentiment for BTC/USD continues to favor a downtrend, as price has consistently failed to push higher than the $3,500 minor support-turned resistance since late 2018. Furthermore, a lack of positive news for Bitcoin will continue to weigh on the number 1 cryptocurrency, as far as this week concerned.
The resolution of the bearish flag pattern is for price to break the lower flag border, in continuation of the downtrend. To get a microscopic view of the price action, we look at the 1-hour chart, where we have pivot points plotted at the areas indicated on the chart below.
Price action is still expected to move within the range of the flag consolidation area, but with several pit-stops along the way. Price is presently at the central pivot area of $3,418. Range of price movement for a day or two will be between the $3,500 price level which acts as the price ceiling, and $3,376 acting as the floor of the flag consolidation area. If the price eventually closes below the $3,376 floor by a 3% penetration, then a resumption of the downtrend will be seen, initially aiming for the next pivot support at $3,338.
A downside break of the flag consolidation does not need volume confirmation. Traders who want to follow the expected downside move should allow for a price recovery to the $3,500 resistance area, then follow the move south if the convergence of resistance levels seen on the daily chart (as well as the flag’s upper border) holds firm. A break of the flag’s lower border by a 3% price penetration factor will also be another trigger to go short.
If a downside break of the flag occurs, price projection could be done using the initial move from $3,546 to the flag’s lower border, or the support pivot points below the flag could be used as potential target areas for a short trade exit.
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The resolution of the bearish flag pattern is for price to break the lower flag border, in continuation of the downtrend. To get a microscopic view of the price action, we look at the 1-hour chart, where we have pivot points plotted at the areas indicated on the chart below.
Price action is still expected to move within the range of the flag consolidation area, but with several pit-stops along the way. Price is presently at the central pivot area of $3,418. Range of price movement for a day or two will be between the $3,500 price level which acts as the price ceiling, and $3,376 acting as the floor of the flag consolidation area. If the price eventually closes below the $3,376 floor by a 3% penetration, then a resumption of the downtrend will be seen, initially aiming for the next pivot support at $3,338.
A downside break of the flag consolidation does not need volume confirmation. Traders who want to follow the expected downside move should allow for a price recovery to the $3,500 resistance area, then follow the move south if the convergence of resistance levels seen on the daily chart (as well as the flag’s upper border) holds firm. A break of the flag’s lower border by a 3% price penetration factor will also be another trigger to go short.
If a downside break of the flag occurs, price projection could be done using the initial move from $3,546 to the flag’s lower border, or the support pivot points below the flag could be used as potential target areas for a short trade exit.
If you appreciate this analysis, don't forget to click on the like and follow buttons :)
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