Bitcoin at Resistance. Potential Cycle High
Updated
We shifted into a bearish bias with the failure of the 200 EMA's. They are starting to curl down. In the last video, I explained that I expected us to test the 8k area near the 200 EMA and thats where we stand. I took a long at the last cycle but I took profit over the holidays due to stagnant nature on unpredictability of low volume trading.
We are right near a range high with the 100/200 EMA cross in our face. This is an area I want to short into the cycle low that will be due in mid February. I'm looking for the high to occur before Jan 15th. It is possible that we have the cycle already at the range high but I don't have a trade just yet.
To go bullish, bitcoin needs to prove itself so if we can get above the that 200 EMA and continue to trend into late January, I will end up stopped out of that trade. A higher high past mid January sets up a right translated bullish cycle and I would shift from bearish bias to neutral/bullish. I'd rather see us go bullish but still lots of work to do here.
We are right near a range high with the 100/200 EMA cross in our face. This is an area I want to short into the cycle low that will be due in mid February. I'm looking for the high to occur before Jan 15th. It is possible that we have the cycle already at the range high but I don't have a trade just yet.
To go bullish, bitcoin needs to prove itself so if we can get above the that 200 EMA and continue to trend into late January, I will end up stopped out of that trade. A higher high past mid January sets up a right translated bullish cycle and I would shift from bearish bias to neutral/bullish. I'd rather see us go bullish but still lots of work to do here.
Note
I will try to make a video soon but for a quick update we are right at the cusp. We ended up coming into this downtrend line and previous support level above the 200 EMA. If we consolidate and break higher after day 30 then I flip from bearish to neutral. If we topped out on the 14th then its still bearish.
In 2018, we had a lot of these strong bull moves that topped out 24-30 days and went straight back down. So I won't jump the gun on buying this. I would prefer to see a strong weekly close this week, higher high next week then wait for the next cycle low in mid February to buy a swing trade long.
Note
Here's another look at 2018 and the reason I don't want to jump the gun and start buying just yet. We have this tendency to top early. Since June we have had a 22, 23, 9 and 4 day cycle highs. So I prefer to be patient.
Note
Still in a neutral position. We rejected at the 200 SMA and the structure still hasn't made a higher high. The price action for this cycle is generally been positive. We just have to realize like the 2018 chart that BTC has had a habit of looking bullish, hitting that 200 SMA and then falling back down to the origin of the move.
The cycle high so far is long enough to potentially be right translated. I'm now looking for 2 bullish scenarios and 1 bearish scenario.
Best bullish scenario - Make a new high above 9200 in coming weeks then a short move down into a cycle low. I will start building a long term swing trade in the pullback that follows with a target of the intermediate cycle high in late spring - summer (TBD).
Bullish short cycle - We may have topped but if we come down a bit and accumulate in the $7500 area around day 50 then this would still be a short but very valid right translated bullish cycle and I would start a swing trade long.
Bearish cycle - We just topped at the 200 SMA rejection and we come right back down to the origin around $6800 or possibly a new low. That would take any longs off the table and likely lead to more chop and sideways grinding. I would not take a swing trade long.
Note
We got the best bullish cycle scenario. Nice move over the 200 SMA, retested yesterday and made a new high for the cycle. Now have a clear right translated cycle and a nice 5 wave impulse.
I would love to see us close the weekly above the 200 SMA. I'd also like to see us go a bit higher and maybe test that 10k floor from this summer and then move down into the next cycle low that will be due in the next 2 weeks. I'm now switching back to bullish and will be accumulating at the next correction. Phase 2 will be forming a higher cycle low then higher high above this cycle. That would confirm a bullish trend and make the December low as a yearly cycle low.
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