BITCOIN'S BULL BREAK, HOW HIGH BEFORE THE FINAL SHAKEOUT???
FOMO is back, Bitcoin is pumping hard, google trend search is up, the moon boys are partying,.....when lambo?
It's was indeed a huge relief to see Bitcoin breakout bullish on a very huge volume after 15 months of continuous downtrend without a higher high. This to me is encouraging, but the disturbing thing right now is the kind of sharp turn around in sentiment, everybody and their grand mother is still so bullish on bitcoin which to me is an indication that the bottom may just not be in yet.
Before we start partying let's look at the chart carefully, paying keen attention to the higher time frames with the understanding that the market is still in wave 4 IMO and this corrective move upwards may just be signaling an end to wave 4, and possible beginning of wave 5.
Monthly:
Huge bull break on a strong volume. The monthly 21 EMA (thing yellow line) is presently acting as a strong resistance at 5240.
We must pay keen attention to the 21 month EMA as it played a significant role in the bottom area of the 2013/2014 bear market, acting as a very strong resistance all through that bear market, and also acted as a strong support from the beginning of the bull market.
The interesting part is that after breaking below the 21 month EMA on Oct 2014, on the two occasions we got rejected by this EMA, we capitulated in What happened to be the final shakeout, traded below the EMA for 12 months, and we finally broke above it on Oct 2015 to kick start the uptrend, providing a strong support throughout the bull market 2015-2017 and part of 2018 bear market.
Exactly 4 years later.... NOV 2018 precisely, we broke below it again and it has since then been providing strong resistance.
If we test it again in this bear market, are we going to see a final shakeout just as we saw in 2014/2015? Or are we going to break above it to kick start a new uptrend immediately? Time will tell.
All things been equal, if this is a fractal repetition as I'm already seeing, and we get rejected by the 21 month EMA @ 5240, I expect us to trade below this EMA level till Sept ending and break above it by Oct/Nov 2019 to kick start the uptrend IMO.
However, a break above this level will nullify our arguments here, and we may be heading for the 6000 Psychological resistance, before a pull back, but this for now is least expected , as bitcoin must at least retest previous low (if we have already bottomed) before an uptrend.
Weekly
On the weekly, we got our higher low at 3200, and now a higher high to complete the wave 4 move of the overall trend.
The breakout looks pretty strong, above us is a cluster of resistance, 5500 and 6000 Psychological resistance and the 50 week MA at 5800.
If we break above 5240 and get rejected at any of the resistance levels, the next support levels below are: 4400-4200, 3950-3750, 3450, 3170.
Daily:
Price broke out strongly on a very huge volume, the daily candle closed above the 200 day MA with a new candle opening just above the previous providing a bullish structure.
Momentum is pretty strong, FOMO is back and supporting this bullish move. The upside target is 5500 and 6000 Psychological resistance.
However, RSI is pretty overbought at 85% on daily and 90% on 4 hours. The weekly stochastic is also at the 90% levels an indication that this move is reaching exhaustion and a strong reversal may just be ahead of us.
The support levels to watch out for are same as weekly support.
In conclusion, let's not shout for joy yet in believe that we are heading for the moon, or that an uptrend has start. No!!!!!, not so quick, BTC must at least retest previous low before moving back up to kick start the uptrend.
It's was indeed a huge relief to see Bitcoin breakout bullish on a very huge volume after 15 months of continuous downtrend without a higher high. This to me is encouraging, but the disturbing thing right now is the kind of sharp turn around in sentiment, everybody and their grand mother is still so bullish on bitcoin which to me is an indication that the bottom may just not be in yet.
Before we start partying let's look at the chart carefully, paying keen attention to the higher time frames with the understanding that the market is still in wave 4 IMO and this corrective move upwards may just be signaling an end to wave 4, and possible beginning of wave 5.
Monthly:
Huge bull break on a strong volume. The monthly 21 EMA (thing yellow line) is presently acting as a strong resistance at 5240.
We must pay keen attention to the 21 month EMA as it played a significant role in the bottom area of the 2013/2014 bear market, acting as a very strong resistance all through that bear market, and also acted as a strong support from the beginning of the bull market.
The interesting part is that after breaking below the 21 month EMA on Oct 2014, on the two occasions we got rejected by this EMA, we capitulated in What happened to be the final shakeout, traded below the EMA for 12 months, and we finally broke above it on Oct 2015 to kick start the uptrend, providing a strong support throughout the bull market 2015-2017 and part of 2018 bear market.
Exactly 4 years later.... NOV 2018 precisely, we broke below it again and it has since then been providing strong resistance.
If we test it again in this bear market, are we going to see a final shakeout just as we saw in 2014/2015? Or are we going to break above it to kick start a new uptrend immediately? Time will tell.
All things been equal, if this is a fractal repetition as I'm already seeing, and we get rejected by the 21 month EMA @ 5240, I expect us to trade below this EMA level till Sept ending and break above it by Oct/Nov 2019 to kick start the uptrend IMO.
However, a break above this level will nullify our arguments here, and we may be heading for the 6000 Psychological resistance, before a pull back, but this for now is least expected , as bitcoin must at least retest previous low (if we have already bottomed) before an uptrend.
Weekly
On the weekly, we got our higher low at 3200, and now a higher high to complete the wave 4 move of the overall trend.
The breakout looks pretty strong, above us is a cluster of resistance, 5500 and 6000 Psychological resistance and the 50 week MA at 5800.
If we break above 5240 and get rejected at any of the resistance levels, the next support levels below are: 4400-4200, 3950-3750, 3450, 3170.
Daily:
Price broke out strongly on a very huge volume, the daily candle closed above the 200 day MA with a new candle opening just above the previous providing a bullish structure.
Momentum is pretty strong, FOMO is back and supporting this bullish move. The upside target is 5500 and 6000 Psychological resistance.
However, RSI is pretty overbought at 85% on daily and 90% on 4 hours. The weekly stochastic is also at the 90% levels an indication that this move is reaching exhaustion and a strong reversal may just be ahead of us.
The support levels to watch out for are same as weekly support.
In conclusion, let's not shout for joy yet in believe that we are heading for the moon, or that an uptrend has start. No!!!!!, not so quick, BTC must at least retest previous low before moving back up to kick start the uptrend.
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