Bitcoin → Broke Weekly Resistance! On to $46,000!? Let's Answer.
Updated
Bitcoin has broken Weekly Resistance at $38,000 and raced to the top of the bull channel around $42,500. Now that the move seems to have played out, what is the next trade?
How do we trade this? 🤔
If you're not already in a long, Do Not Enter the market. We're too close to the bull channel resistance, we haven't tested the previous Weekly Resistance as Support, RSI is over 76.00 and far above the Moving Average. We should remain bullish given the macro trend and that the top of the 2021 Trading Range at $46,000 is at the proposed Measured Move target.
Best to wait for a pullback and find support again, likely around $40,000 at Bull Channel support. A bull signal bar and confirmation candle will give us the necessary probability to enter a 1:2 Risk/Reward Ratio Long.
💡 Trade Idea 💡
Long Entry: $40,700
🟥 Stop Loss: $38,500
✅ Take Profit: $45,100
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Breakout from Previous High Support!
2. Bull Channel, Bias to Long.
3. Weekly Resistance Broken! Possible Measured Move Up.
4. $46,000 Measured Move Lines Up With Lifetime Resistance.
5. RSI over 76.00, Bias to Short for the short-term.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
How do we trade this? 🤔
If you're not already in a long, Do Not Enter the market. We're too close to the bull channel resistance, we haven't tested the previous Weekly Resistance as Support, RSI is over 76.00 and far above the Moving Average. We should remain bullish given the macro trend and that the top of the 2021 Trading Range at $46,000 is at the proposed Measured Move target.
Best to wait for a pullback and find support again, likely around $40,000 at Bull Channel support. A bull signal bar and confirmation candle will give us the necessary probability to enter a 1:2 Risk/Reward Ratio Long.
💡 Trade Idea 💡
Long Entry: $40,700
🟥 Stop Loss: $38,500
✅ Take Profit: $45,100
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Breakout from Previous High Support!
2. Bull Channel, Bias to Long.
3. Weekly Resistance Broken! Possible Measured Move Up.
4. $46,000 Measured Move Lines Up With Lifetime Resistance.
5. RSI over 76.00, Bias to Short for the short-term.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
Note
As predicted, Bitcoin hit the top of the bull channel before pulling back! This 4HR candle has a few minutes until it closes. If it closes below channel resistance, we should look for a pullback to the target area of $40,000-$41,000. Look for a strong bull signal and confirmation to long to at least $46,000 per my analysis. More updates to come as they unfold!Note
Bitcoin is showing weakness at the bull channel resistance as shown in this 4HR chart! As predicted, Bitcoin is likely coming down for a pullback. An ideal outcome is the pullback reaches the bull channel support, but be vigilant for the bull candle continuation candle at the 4HR 30EMA. Also notice that the 30EMA on the Daily chart roughly aligns with bull channel support. Those are the two areas to watch out for.
More updates to come as they unfold!
Note
Bitcoin finally coming down to the 4HR 200EMA and bull channel support! If you're not already in a trade, stay on the sidelines and see how this plays out.
More updates to come as they unfold!
Note
We're still right on track! The price has come back up near the top of the selloff candle from December 11th. The selloff was followed by a doji (indecision candle) on December 12th, a strong bull candle closing near its high on December 13th, and are currently drifting sideways for the last day and a half, but failing to break down. The Daily RSI also has plenty of room for another move up.
A move to $46,000 would complete the measure move and hit the top of the 2021/2022 trading range between $30,000 and $46,000. The data is telling us that $46,000 is a key level and the selloff on December 11th was our first sight of the bulls getting weak near the end of this bull run.
Note
Zooming into the 1HR chart, the contact with support gave us a fantastic buy setup! A great buy signal bar at support followed by a confirmation buy bar, a bull bar closing on its high. It's reasonable to long at that level and go for profits at 1:2 Risk/Reward where the measured move for Bitcoin would complete ($45,700).
It's also reasonable to scalp here at 1:1 Risk/Reward ($43,500) with the concern that we're pretty far into this bull run.
More updates to come as the events unfold!
Note
Zooming into the 1HR chart again, Bitcoin has closed a nice bull candle on its high and above the previous high. This indicates a move toward the $45,700 price target where strong resistance is expected. If you’re still in the long from the channel support, I would remain there until the gap to $45,700 is closed.
More updates to come as the events unfold!
Note
Bitcoin broke resistance and tested it, establishing support. This is looking very good for our trade. What we need now is a break of the previous high around $45,000 and a closed 4HR candle to give us the probability for the $45,700 target. If the price does break, we could see a surge beyond $46,000! We need to be careful at these heights, per my recent Bitcoin Lifetime Analysis, I don't believe this is the *the* bull run to all-time highs as seen here:
Note
Bitcoin has been meandering sideways since our last update where we identified that strong bull candle closing above the weak resistance line. Rather than a sign of strength, it happened to be more of a bull capitulation event to retest the previous high. The price has been sideways since that day on December 20th and we still haven't achieved out $45,700 price target.
If you took half profits at 1:1 Risk/Reward ($43,500) and moved your stop loss up to entry, then you're set! Hang onto that other half of your position until at least $45,700, but its reasonable to hold longer if the price action is strong enough to suggest a continuation. I'm skeptical of that outcome, see my lifetime analysis above for the reasons why.
There aren'y any warning signs to abandon the long train just yet. Let's wait for more price action to play out and I'll post another update!
Note
Bitcoin has closed bars outside of the bull channel and almost made contact with the 4HR 200EMA! What we need to watch for now is support at the 200EMA if this long trade is to continue. If we fall below, our new stop loss, which is now at entry price, will be hit and the long trade will be over.
My Bitcoin Lifetime Analysis depicts a major reversal back to the $20,000-$25,000 range before new all-time highs are printed. I'll be watching for that reversal to happen in this area which leaves me with a reversal bias on most crypto currency pairs. We're not in short mode yet! But I believe we should be looking out for it.
Note
Bitcoin made an attempt to come back into the channel, but was rejected again by the red resistance line. We now have a 4HR candle near its low hanging below the support line!
Watch the close of the next handful of 4HR candles; we need a strong close below the support line and Daily 30EMA to have enough probability to short. An additional re-test of the 30EMA as resistance provides additional probability of profit for the short, but I do not think its required to enter.
When those conditions are met, the proposed short entry is around $42,000, stop loss above previous high around $45,000, and take profit at $36,000 for a nice 1:2 Risk Reward. It's also reasonable (and my personal preference) to take half profits at 1:1 Risk/Reward and move the Stop Loss up to your entry price. This locks in profits and allows you to swing the rest of your position without the worry of going in the negative (good for trading psychology). You can still take the other half of your position at 1:2, but I recommend swinging to 1:3 or until you see a reversal start to pan out. 1:1 profits would be at $39,000.
Let's keep an eye on the 4HR chart and see how this plays out!
Note
Bitcoin spent a day or so on the 4HR 200EMA before bouncing to the upside with a strong bull response! We're a ways from our justification to short and *if* the time is near, we need another good rejection at the channel resistance ($44,000), the previous high ($44,800) or the measured move target of $46,000.
Until then, we wait for that opportunity and adjust our bias accordingly. I would be long scalping on the 1HR during this run but on this 4HR and Daily timeframe, I'm looking for the trend change.
Note
Bitcoin measured move target touched! Now we wait for the response as we have clear resistance at that exact price. I'm still looking for a short entry and at this point on this timeframe, I'm looking for prices below the previous trading range around $40,000.
A new BTC analysis will be coming soon!
Note
Just putting a bow on this beautiful measured move with the chart above. The Daily candle is about to close and it's clear, the measured move target of $46,000 was proper with strong resistance.
Note
And the sell-off! Alright, that was the final update. New analysis will be dropping today or tomorrow for the next trade setup.
-Joe Dean
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