BTC in depth analysis
Updated
Multi-Timeframe BTC Analysis
3 Day:
We are still in a bearish trend. Nothing has changed there. Broke the symmetrical triangle, and have potentially formed a descending wedge (invalid if price closes below the support - lower red line)
Bounces do occur in bearish trends and we have created two points of descending price action (lower highs) on BTC over the past 5 months that are used to draw a ray and show the trend resistance (upper teal line). Ichi Kijun resistance and downtrend resistance are currently in the same area around $7900. Broken Symmetrical triangle support, now resistance, and downtrend resistance converge at $7500.
CMF shows that money is still flowing out of BTC, we have not managed to break into a positive money flow yet. Flow is negative for the first time since June 2016.
Volume is still decreasing overall - it would be more bearish if it was increasing with the price decline.
RSI and Stoch RSI show that we are getting a bounce, and could see another 1-2 weeks of a dead cat bounce.
Failure to hold the descending wedge pattern will likely result in a return to the long term slow bullish trend (Purple support line from bullish trend starting March 2017 ), which we could test anywhere between $4900-5300 before September. This would put all September futures Longs underwater and create strong selling pressure as those longs are forced to cover.
Long term view with breakers (OBs/magic-rectangles) marked (green). Long term bullish trend supports Marked (lower purple lines) - some of these lower trends are where people are getting the 1-2k predictions from:
Expect price to interact with these levels and look to these areas for opening larger positions.
The 5300 area mentioned above has several converging supports and I expect it to hold. If it does not, There are no real trend supports before 2k, but there are previous highs/lows (4750 and 4400 for example) which may act as support and a significant bullish OB in the 3500-4100 range which I doubt we would break below.
Price levels this low would likely shake out anyone who purchased in the second half of last year.
Long term view - Shows box with Volume gaps and previous price action at top and bottom of that level. This is useful because price will often find support at the top or bottom of these volume gaps, but quickly move through them as it has in the past:
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1 Day: Still very little for bulls on this time frame.
If price action can stay above the Tenken support at 6300 there may be more upward, or at least sideways, price movement toward the kumo, but there is nothing yet that shows we have potential to enter or break through the daily kumo.
Bulls can hope for some sideways action or a continued dead cat bounce, but that is all that looks possible at the moment.
Good news for the bulls is that the 10/20 MA cross is about to take place so long as price can stay above 6300; RSI, Stoch RSI, and CMF are in bullish trends that look similar to the previous larger dead cat bounce in April, just weaker this time. And the OBV did break through a long term downtrend from the 19k high. It is now also breaking through resistance from a slower downtrend starting at the 11.5k high. (
For the Bears - Bears are still in control. Buy volume is weak, but be careful because overall volume is declining which means there is less interest in selling at this level too.
There are multiple resistances for bulls to overcome, the most immediate is the horizontal resistance from the previous low which needs to turn into support if bulls have a chance (strong blue line). Below 8k there are both horizontal and trend resistances, the kijun and the kumo. And all these are places where bears will look to open short positions. Essentially, these levels agree with the ones on the 3 day chart.
Traders will open short positions at resistance as a hedge of an open long, or as their main position. Stops are generally placed above so that if a resistance becomes a support losses are minimal. In a bearish trend like this stops on Shorts can be wider as they are a safer position, but remember to look for reasons why you are may be wrong once you open a position. This will help keep your bias in check. We are always biased in the direction of our open position. This is unavoidable. Remember to keep this bias in check.
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12 Hr: Looks better for the bulls here.
Good bullish trends on the RSI, Stoch, and CMF supporting this price rise.
Volume is still low overall. There has been an increase overall in buying and decrease in selling since June 24th.
Ichi - Price action has entered the Kumo and closed a candle inside. So long as price can stay inside the Kumo we can expect a continued bullish rise. Longs will typically take profit if price falls out of the kumo and look to swap to a short. The Tenkan is still below and will provide a potential support area if the price does drop out of the kumo. An Edge to edge trade is possible on the 12hr kumo now that a candle has closed inside. The Kumo targets on an edge to edge are the same as the levels mentioned earlier (7500 and 79000, which happen to fall along the the descending wedge resistance (teal line above the red kumo)
BTC still has to breach and close above the horizontal resistance it is currently testing, and the bearish OB (red) that many people are shorting. If price can continue to fail to break above this level without it being a problem for the bulls so long as price stays inside the kumo cloud. A break of that OB would be a strong bullish signal. Many traders would cover shorts and flip long at that point.
6hr:
More good signs for the bulls, but still inside/under the bearish OB. Basically the same as the 12hr chart, with more detail.
Bullish TK took place, and price has responded as expected thus far. Long entries are typically taken along the Tenkan (smaller orders) and the Kijun (larger orders) so long as the trend stays bullish. If price cannot exit the cloud above, or breaks below the Kijun longs will typically cover.
New detail - lower strong blue horizontal: shows the support for the range we have been trading in for several days. A break below that level would be bearish.
Conclusion:
Lower time frames show some decent bullish action which has real potential to continue up to $7500 or $7900. But Higher time frames still look strongly bearish. There are many areas of resistance for BTC between current levels and 8k. If it can continue climbing and break through the descending wedge some of the higher time frames might start to look more bullish, but unless something changes any increase in price is likely to be short lived. Trade accordingly.
Note
No major changes.
Possible Three line Strike forming on thr 12hr - current candle closes in 1.5 hours watch for the close and possibility for a strong bullish candle reversal on the following.
Price action still holding inside the Kumo and has closed 3 candles inside now. Still looking for Price to hold inside the cloud and break above the OB (red box) within the next day.
I opened a Short in the OB as a hedge on 1/3rd of my long position.
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