Good morning ladies and gentlemen and welcome to my daily analysis of Bitcoin. Today I have the 4hr pulled up after a small dump yesterday. We lost some key support in the drop only to recover a bit. We are in slightly better shape than we were a few candles ago but that could all change in the blink of an eye. We almost hit 9k during the drop. The recovery has been pretty impressive if you ask me but the bulls will need to push even harder to reverse this seemingly new trend forming. Lets take a closer look at the charts.
The drop was pretty sudden yesterday and I saw a post on facebook about a drop. I jumped to the charts and we were in the lower 9k region. I thought no sweat. My stop loss will save me and it did. But now I am hesitant about reentry and that is normal. Its like baseball folks. You dont necessarily need to swing at every pitch thrown your way. You will hit a home run next time you are at bat. I may take the walk this go round... Main reason I say that is we have some strong resistance above us at this time which can snowball into a downtrend.
The strong resistance above us is the 4hr cloud and the 4hr 50 MA. We even dropped below the 4hr 200 MA briefly but have since recovered putting the 200 MA back below us. So now we have some support on the 4hr but that could change quick. This looks like the start of a continuation pattern... Decent sized dip followed by a small recovery followed by another dip (just follow the arrows) There is no guarantee this will happen but this is what I see on the chart. This is the main reason I am hesitant to go long at this point and Im definitely not the only one that is thinking this..
One thing I noticed as well is as soon as we dipped into the oversold area of the RSI we had a slight recovery. This is typically how RSI works on the chart. When it dips below. We recovered to just above the 200 MA on the chart which means we do have some support at this time but it doesnt look very strong. The reason Im thinking this way is the 4hr 50 MA and the 4hr cloud is residing above us at this time. They are lingering above us daring the candles to break through. It looks to me like a good excuse to take us down some more. In the scenario I see playing out is we may climb back to the cloud or the 4hr 50 MA before being rejected again. The 200 MA will be our last hope on the 4hr if this happens. The 200 MA saved us already once but the more we test it the more likely it will fail. If that were to occur now we would need to cycle to the daily and see where more support lies.
On the daily the 50 MA is holding the candles up at this time. If we do drop more we will lose the daily 50 MA and the next step down would be the daily cloud (top border) which lies around 8900. There are no guarantees in trading so its either we find support on top of the cloud or within the cloud itself. If we do enter that daily cloud we can dip as low as 8100. 8100 is significant to me because that is where the 200 MA on the daily lies. 200 MA is a reliable indicator. The 200 MA on the daily is buried within the daily cloud so it could get a bit sticky if we do enter the cloud. Lets hope that top border of the cloud holds us up.
All in all it looks bearish to me. I have been wrong before and it wont be the last time. I tend to look for the path of least resistance when I make a chart. That path looks like it is down to me. This market is cyclical which means what goes up typically comes down. I also know there is a teeny tiny gap at 7600 (approximately) that may come into play if the bears run wild on us... Someone needs to wake the bulls up. Lets hope the 4hr 200 MA and the daily 50 MA holds. These are both acting as current support and if they fail we may need to bust out the umbrellas. But then again WTFDIK right????
TLDR: If you want to long this I beg you... Use a stop loss!!!
The drop was pretty sudden yesterday and I saw a post on facebook about a drop. I jumped to the charts and we were in the lower 9k region. I thought no sweat. My stop loss will save me and it did. But now I am hesitant about reentry and that is normal. Its like baseball folks. You dont necessarily need to swing at every pitch thrown your way. You will hit a home run next time you are at bat. I may take the walk this go round... Main reason I say that is we have some strong resistance above us at this time which can snowball into a downtrend.
The strong resistance above us is the 4hr cloud and the 4hr 50 MA. We even dropped below the 4hr 200 MA briefly but have since recovered putting the 200 MA back below us. So now we have some support on the 4hr but that could change quick. This looks like the start of a continuation pattern... Decent sized dip followed by a small recovery followed by another dip (just follow the arrows) There is no guarantee this will happen but this is what I see on the chart. This is the main reason I am hesitant to go long at this point and Im definitely not the only one that is thinking this..
One thing I noticed as well is as soon as we dipped into the oversold area of the RSI we had a slight recovery. This is typically how RSI works on the chart. When it dips below. We recovered to just above the 200 MA on the chart which means we do have some support at this time but it doesnt look very strong. The reason Im thinking this way is the 4hr 50 MA and the 4hr cloud is residing above us at this time. They are lingering above us daring the candles to break through. It looks to me like a good excuse to take us down some more. In the scenario I see playing out is we may climb back to the cloud or the 4hr 50 MA before being rejected again. The 200 MA will be our last hope on the 4hr if this happens. The 200 MA saved us already once but the more we test it the more likely it will fail. If that were to occur now we would need to cycle to the daily and see where more support lies.
On the daily the 50 MA is holding the candles up at this time. If we do drop more we will lose the daily 50 MA and the next step down would be the daily cloud (top border) which lies around 8900. There are no guarantees in trading so its either we find support on top of the cloud or within the cloud itself. If we do enter that daily cloud we can dip as low as 8100. 8100 is significant to me because that is where the 200 MA on the daily lies. 200 MA is a reliable indicator. The 200 MA on the daily is buried within the daily cloud so it could get a bit sticky if we do enter the cloud. Lets hope that top border of the cloud holds us up.
All in all it looks bearish to me. I have been wrong before and it wont be the last time. I tend to look for the path of least resistance when I make a chart. That path looks like it is down to me. This market is cyclical which means what goes up typically comes down. I also know there is a teeny tiny gap at 7600 (approximately) that may come into play if the bears run wild on us... Someone needs to wake the bulls up. Lets hope the 4hr 200 MA and the daily 50 MA holds. These are both acting as current support and if they fail we may need to bust out the umbrellas. But then again WTFDIK right????
TLDR: If you want to long this I beg you... Use a stop loss!!!
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.