Bitcoin - Big Move Incoming And This Pattern Could Be a Big Clue
Chop. c h o p. CHOP.
The last 3 months have been nothing but ranging chop and have humbled many traders.
I am not a big fan of trading ranges, but have had some good trades nonetheless playing the support and resistance levels.
I've also had my fair share of stop losses hit in the nasty stop hunts on the low liquidity margin exchanges.
That being said, I did find this really interesting historical trend for Bitcoin that I wanted to share with you guys!
As always, I don't keep anything to myself. Some people actually get mad at me for sharing some of my edges with the community. (you should read the messages I get.)
I don't really care about that as I just love to share my findings with you guys and let you decide what you want to do with it.
After the initial impulse out of the bear market, Bitcoin loves to form an extended consolidation pattern lasting an average of 22 weeks in duration before touching the 20 period weekly moving average and continuing into its bullish uptrend.
Triangle patterns often represent 50/50 patterns, and depending on how you draw the lines on this current formation, you can get either a descending triangle or a near symmetrical triangle.
Here are all of the important diagonal support/resistance and areas of interest I am watching:
SUPPORT =
.236 from Local Price Action – $10,189
20 DMA – $10,182
Support Zone – $10,139 – $10,111
100 DEMA – $9841
Large Triangle Pattern – $9348
Support Zone – $9333 – $9078
21 WEMA – $9227
Local Downside Trend – $8869 – Broke with no retest
RESISTANCE =
9 DEMA – $10,298
Support Zone (Remains “Support Zone” until Candle Close) – $10,403 – $10,354
100 DMA – $10,378
Swing-Fail Trendline – $10,417
50 DMA – $10,451
Trend from 100 DMA Wicks – $10,795
Local Price Action .382 – $10,894
Channel – $11,022
Weekly Resistance Zone – $11,382 – $11,532
Local PA and ATH to 2018 Low 50% Fib Level – $11,462-$11,464
We should also not forget the futures chart as there are several gaps that are currently unfilled that we want to keep our eyes on.
AOI (AREA OF INTEREST) =
CME Gap North – $11,695 – $11,795
CME Gap South – $8985 – $8515
Taking a look at Bitmex, we can see this pattern forming as well.
As you can see, it looks like we may be coming to a decision point within the next 3-6 weeks, which would also line up with the average duration of the previous consolidation patterns.
In both cases, it's important to follow the former trend as they typically continue to move in the direction of the former trend.
As long as we can hold the 20MA on the weekly as support, then I believe we will eventually make our way out of the triangle and break upwards as we've seen several times in the past.
What do you guys think?
Let me know in the comments below and post some charts! I love to see what you guys are coming up with as well.
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