BitcoinShort
BTC/USD - Falling Wedge - Further Drop Inevitable
Updated
Bitcoin has been in a continuous downtrend since it broke the support level at 5700 and shows no signs of reversal at all. Furthermore, a falling wedge can be spotted on the 4hour chart that could bring the price towards 3300-3400. In my post, almost 2 months ago I was discounting a possibility of such scenario and for now, it plays pretty well (check the chart below). The bottom is definitely somewhere close, and there are clear signs that big whales are slowly accumulating huge amounts of BTC from the longer term investors that are panicaly selling the coin.
From the weekly chart on the right we can see that we are currently testing the 200d EMA, which is the only hope that the price would bounce from the current levels, but for me thats the only indicator of the bottom. Everything else being bearish, at least in the short-term perspective. From the VPVR (Volume Profile Indicator) it can be seen that we are currently at an important resistance zone and a break below the 4200 price handle will easily bring us towards the next level of 3300-3400. The following level serves as an extremely important support zone established on September 2017. I personally expect that around those levels the buying volume will skyrocket and the price will bounce back towards 5k-6k. To add more meaning to this support level, if the rising wedge, which can be seen on the 4h chart plays out, the MPO (Minimum Price Objective), projected from the base of the pattern lies exactly around that 3300 level. By that time the weekly momentum indicators (both the RSI and Stochastic) will get to extreme oversold levels which in return will give us a buy signal and hopefully we will see a strong bounce before by the end of this year. But that is just one scenario.
The second scenario that I see is that the price will find a bottom much below the 3k handle. If the triangle will play out (weekly chart) the price drop can accelerate towards 1700-2000 USD. That sounds like a nightmare, but can be quite possible if the big whales will not be satisfied and will not accumulate enough.
Nether-the-less, there is quite a good opportunity for the short-term traders to trade the bear market. A short trade can be opened on the break of the falling wedge targeting 3400 price level. After, a longer-term buy trade can be opened, but personally will be waiting for a bottoming pattern to be formed.
In both cases, I see a bright future for the BTC and am one of those people who believe that both the technology adoption and the price of some major cryptocurrencies will skyrocket throughout the nest 2-3 years. Taking into account all of the positive developments around BTC, especially the launch of the ETF in January and the latest regulatory work, will drive the institutional investment adoption, it is quite possible we will see BTC at 100k soon :)
Support my analysis by giving LIKES and FOLLOWS. It helps the channel grow and motivates me to post free content.
From the weekly chart on the right we can see that we are currently testing the 200d EMA, which is the only hope that the price would bounce from the current levels, but for me thats the only indicator of the bottom. Everything else being bearish, at least in the short-term perspective. From the VPVR (Volume Profile Indicator) it can be seen that we are currently at an important resistance zone and a break below the 4200 price handle will easily bring us towards the next level of 3300-3400. The following level serves as an extremely important support zone established on September 2017. I personally expect that around those levels the buying volume will skyrocket and the price will bounce back towards 5k-6k. To add more meaning to this support level, if the rising wedge, which can be seen on the 4h chart plays out, the MPO (Minimum Price Objective), projected from the base of the pattern lies exactly around that 3300 level. By that time the weekly momentum indicators (both the RSI and Stochastic) will get to extreme oversold levels which in return will give us a buy signal and hopefully we will see a strong bounce before by the end of this year. But that is just one scenario.
The second scenario that I see is that the price will find a bottom much below the 3k handle. If the triangle will play out (weekly chart) the price drop can accelerate towards 1700-2000 USD. That sounds like a nightmare, but can be quite possible if the big whales will not be satisfied and will not accumulate enough.
Nether-the-less, there is quite a good opportunity for the short-term traders to trade the bear market. A short trade can be opened on the break of the falling wedge targeting 3400 price level. After, a longer-term buy trade can be opened, but personally will be waiting for a bottoming pattern to be formed.
In both cases, I see a bright future for the BTC and am one of those people who believe that both the technology adoption and the price of some major cryptocurrencies will skyrocket throughout the nest 2-3 years. Taking into account all of the positive developments around BTC, especially the launch of the ETF in January and the latest regulatory work, will drive the institutional investment adoption, it is quite possible we will see BTC at 100k soon :)
Support my analysis by giving LIKES and FOLLOWS. It helps the channel grow and motivates me to post free content.
Note
Analyses on BTC, posted 2 months ago
Trade active
As expected the wedge has finally been broken and the short trade was initiated. Entry: 4120
SL: 4553
TP: 3420
Trade active
Expect a retest move to the bottom of the wedge to happen before further declining to the target level.Trade active
It looks like a retest move that had been expected happened and now we should go down to 3400.Note
Check out the analyses of this guy, think his longer-term view is great. Wanted to make smth similar but don't like to copy ideas.
Trade active
Update:The shorter-term trade did not go as initially expected and what looked as the retest of the wedge went higher and now consolidates inside it. Non-the less, still think that the picture is bearish. The price is currently testing the downtrend line (previously the upper line of the wedge) + the 20d EMA. Usually, the EMA serves as an important resistance zone and think that the downtrend will hold and we will get another leg down to the anticipated target.
For me, it would be an even better set-up to open a longer-term buy trade at the bottom, as it is highly likely that RSI will show a bullish divergence next time we go down towards 3000-3300.
Trade active
Unfortunately the trade did not go quite as planned. It looks like the double bottom has been set. I have placed a TP order at the entry level. There is a small head and shoulders pattern in play currently, thus expect the price to reach the entry level.
Trade closed: target reached
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