Bitcoin, Shake Out Wick to 8000/7500
Updated
Unfortunately still moving inside of the consolidation range. Still the big question for everyone, are we breaking up or are we breaking down. Chances for a big move, so a 1K move in one day is quite big, because normally the bigger the consolidation the longer the distribution or accumulation has been.
I started writing like an hour ago, just before that last drop, thinking damn i am too late. Then of course a wick up again, thinking okay glad i waited :) LOL. These wicks make analyzing a chart so much more difficult, because it's whales hiding there footsteps. If it's on one side only, you could say it's distribution or accumulation, but we see it on both sides.
Anway, that channel i said past week could be in play has been the thing to watch so far, but unfortunately there have been false signals with that as well. There is a difference in detail though, the 4H candles in both yellow circles are similar, both buy signals, but few days ago it was stronger and the follow through was bigger and faster. Now it's just details on low time frame, but maybe it's a sign. From what i can see, if it drops below 9180/70, the counter attempt of the bulls might be failure then.
There is resistance now around 9300 and the previous high as well around 9450. I think for a bull version, we should see something like the blue line. So a rally towards the 9700/800 and then drop some to form the right shoulder. So, if we would see a touch of 9700/800 again, i will probably become bullish myself as well.
For the bears, as mentioned several times past weeks, that thick blue line is the key thing for the bulls/bears. As long as we don't see a clear break of that blue "back up plan" line, a bounce up can still easily happen. So above that blue line, bulls still have a good chance of taking over. The first challenge for the bears, is breaking that green line. As long as that doesn't happen, bulls have the upper hand because the trend of higher lows will remain intact. The green line is around 9000 and the blue around 8700 at for coming days.
Now what are my personal thoughts here. When looking at the chart alone, there are signs for both sides, but i would almost say that bulls have the upper hand, but only slightly. The biggest signal though from both sides, is in favor of the bears. Something i talked about since it happened to why i tend to be slightly bearish biased. That is the bull trap at the red circle on the left. Normally these things are VERY powerful. Only reason why i doubt it now, is because normally we see a counter move (so a drop), much sooner after the fake breakout.
Also a big reason for me lately, is how Bitcoin has been under performing the stock market. We all know Bitcoin follows the stock market most of the time, but lately it has been barely following the rallies but it does still drop most of the time when the stock market dumps. Since the stock market and especially the Nasdaq have limited upside potential, there are only 2 options IMO. Either Crypto detaches itself from the stock market or there is more downside potential than up.
Now alts have been very good past week or so, but these have been traps as well more then enough times past 2/3 years. So i am rather neutral on this sign. I mentioned past week, corporate second quarter earnings are coming now, which could cause big movements in the stock market and therefore for Bitcoin as well.
No to try to keep things more simple, think as long as we don't have a daily close above 9450 or below 9000, the shit show can continue, other words :), market is somewhat neutral.
In the chart below I am trying to compare similar setups. There seems to be a clear difference between the April flag/consolidation and the other 3. In April, the third leg was a higher low, while with the other it was a lower low and eventually even making another lower low with nr 5.
Yesterday the stock market took a big hit, especially the Nasdaq. The daily close on the Nasdaq is normally a huge sell signal and also potential for THE high. Of course it depends on the coming days, if it bounces a bit up, it could be done already, but at the moment the futures are dropping again. Also have the July monthly expirations, word is that retail has been going crazy on call options. So big chance those will get busted with a drop this week as well.
Conclusion:
As mentioned, as long as we don’t have a daily close above or below 9000 and 9450, sideways can continue. The chart looks neutral to slightly bullish, together with alts and other things I mentioned. But, the bull trap at 10.400 but maybe the biggest weight, being the stock market that could drag it down, makes me think a move down is more likely. Maybe if at some point we see stocks dump and Bitcoin hold strong, could be a change in favor of the bulls. Together with earning seasons of stocks, of which I think will be worse than expected in general. Where in Europe people act as if life is normal, in the rest of the world Corona is making daily records. So it’s not a question if, but WHEN will the second wave come. That has to have influence on stocks and therefore on Bitcoin as well.
So TA might be slightly in favor of the bulls, but the macro economics and the real world are against it at the moment. Unless, maybe for once, Bitcoin would show it’s try colors and does what it was created for, being THE alternative for fiat money.
Don’t forget to like if you appreciate this 😊
Previous analysis:
I started writing like an hour ago, just before that last drop, thinking damn i am too late. Then of course a wick up again, thinking okay glad i waited :) LOL. These wicks make analyzing a chart so much more difficult, because it's whales hiding there footsteps. If it's on one side only, you could say it's distribution or accumulation, but we see it on both sides.
Anway, that channel i said past week could be in play has been the thing to watch so far, but unfortunately there have been false signals with that as well. There is a difference in detail though, the 4H candles in both yellow circles are similar, both buy signals, but few days ago it was stronger and the follow through was bigger and faster. Now it's just details on low time frame, but maybe it's a sign. From what i can see, if it drops below 9180/70, the counter attempt of the bulls might be failure then.
There is resistance now around 9300 and the previous high as well around 9450. I think for a bull version, we should see something like the blue line. So a rally towards the 9700/800 and then drop some to form the right shoulder. So, if we would see a touch of 9700/800 again, i will probably become bullish myself as well.
For the bears, as mentioned several times past weeks, that thick blue line is the key thing for the bulls/bears. As long as we don't see a clear break of that blue "back up plan" line, a bounce up can still easily happen. So above that blue line, bulls still have a good chance of taking over. The first challenge for the bears, is breaking that green line. As long as that doesn't happen, bulls have the upper hand because the trend of higher lows will remain intact. The green line is around 9000 and the blue around 8700 at for coming days.
Now what are my personal thoughts here. When looking at the chart alone, there are signs for both sides, but i would almost say that bulls have the upper hand, but only slightly. The biggest signal though from both sides, is in favor of the bears. Something i talked about since it happened to why i tend to be slightly bearish biased. That is the bull trap at the red circle on the left. Normally these things are VERY powerful. Only reason why i doubt it now, is because normally we see a counter move (so a drop), much sooner after the fake breakout.
Also a big reason for me lately, is how Bitcoin has been under performing the stock market. We all know Bitcoin follows the stock market most of the time, but lately it has been barely following the rallies but it does still drop most of the time when the stock market dumps. Since the stock market and especially the Nasdaq have limited upside potential, there are only 2 options IMO. Either Crypto detaches itself from the stock market or there is more downside potential than up.
Now alts have been very good past week or so, but these have been traps as well more then enough times past 2/3 years. So i am rather neutral on this sign. I mentioned past week, corporate second quarter earnings are coming now, which could cause big movements in the stock market and therefore for Bitcoin as well.
No to try to keep things more simple, think as long as we don't have a daily close above 9450 or below 9000, the shit show can continue, other words :), market is somewhat neutral.
In the chart below I am trying to compare similar setups. There seems to be a clear difference between the April flag/consolidation and the other 3. In April, the third leg was a higher low, while with the other it was a lower low and eventually even making another lower low with nr 5.
Yesterday the stock market took a big hit, especially the Nasdaq. The daily close on the Nasdaq is normally a huge sell signal and also potential for THE high. Of course it depends on the coming days, if it bounces a bit up, it could be done already, but at the moment the futures are dropping again. Also have the July monthly expirations, word is that retail has been going crazy on call options. So big chance those will get busted with a drop this week as well.
Conclusion:
As mentioned, as long as we don’t have a daily close above or below 9000 and 9450, sideways can continue. The chart looks neutral to slightly bullish, together with alts and other things I mentioned. But, the bull trap at 10.400 but maybe the biggest weight, being the stock market that could drag it down, makes me think a move down is more likely. Maybe if at some point we see stocks dump and Bitcoin hold strong, could be a change in favor of the bulls. Together with earning seasons of stocks, of which I think will be worse than expected in general. Where in Europe people act as if life is normal, in the rest of the world Corona is making daily records. So it’s not a question if, but WHEN will the second wave come. That has to have influence on stocks and therefore on Bitcoin as well.
So TA might be slightly in favor of the bulls, but the macro economics and the real world are against it at the moment. Unless, maybe for once, Bitcoin would show it’s try colors and does what it was created for, being THE alternative for fiat money.
Don’t forget to like if you appreciate this 😊
Previous analysis:
Note
New Bitcoin analysis:
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