BITCOIN - The Bounce Area & Breakout Confirmation!
Updated
After the pump from $8,000 to $8,900 the Bitcoin price has stayed stable and it has started to move slightly downwards. The downwards movement has drawn some confirmed highs and lows and we can start to identify some good levels for further bounces/breakouts. Without a big talk, we start right away!
The bounce area at $8,250 - $8,430 (blue box)
As you see, the price moves slowly downwards and it has started to form a descending channel. If the BTC price makes a little throwback (movement downwards) then there is a pretty strong price level at $8,250-$8,430. This blue box consists of several price action criteria which all indicate that the next bounce should come exactly from this level.
The bounce area consists of:
1. "The trend is your friend" - Perfect, the bounce stays into the trend direction!
2. Previous resistance levels become support level (the orange line at $8,353), a classical role reversal or retest situation!
3. The trendline since 17. May, pulled from the wicks and having three touches. A bit subjective but it matches with this area and in overall it should act as a price supporter.
4. Channel (Bull FLag) bottom trendline should act as a support level and it matches also with our crossing area inside the blue box. Channels are usually parallel and the bottom channel trendline is a copy/paste from the upper trendline.
5. Fibonacci retracement 38%
6. Fibonacci retracement 62%
7. 1H EMA 200 is inside the box which should act as a support level
8. 4H EMA 50 is also inside the marked area and should act as a supporter.
As you see, this is actually a very strong price level. Multiple indications are matching each other inside the blue box at $8,250 - $8,430.
As always, perfect would be a bullish candlestick pattern on some of the higher timeframes (1H+)
Alert: Just below the blue box is a red area. If the 4H candle gets a close inside or below the red area then you should be very cautious. The trendline and the strong price levels get cracked after the close around the red area and this can be pretty nasty. So, watch out if the 4H candle gets a close inside or below the red box.
Bullish breakout - Bull Flag
The prementioned descending channel is actually a bullish/continuation chart pattern Bull Flag. The Bull Flag gets confirmed after the candle close above the upper trendline. The upper trendline is actually a counter trendline (small down-trendline) and if this breaks then those counter trendline breaks have guided the price multiple times into the bigger trend direction. So, wait for a breakout from the Bull Flag which should confirm further movement upwards. Better is a 4H candle close confirmation above the upper trendline! The pattern target and some waves can guide the price into my last target area around $10,000!
"If you asked me to distill trading down to its simplest form, I would say that it is a pattern recognition numbers game. We use market analysis to identify patterns, define the risk, and determine when to take profits. The trade either works or it doesn’t."
– Mark Douglas
Feel free to support my idea post by hitting the "LIKE" button, it is my only fee from You!
Have a nice day,
Cheers!
The bounce area at $8,250 - $8,430 (blue box)
As you see, the price moves slowly downwards and it has started to form a descending channel. If the BTC price makes a little throwback (movement downwards) then there is a pretty strong price level at $8,250-$8,430. This blue box consists of several price action criteria which all indicate that the next bounce should come exactly from this level.
The bounce area consists of:
1. "The trend is your friend" - Perfect, the bounce stays into the trend direction!
2. Previous resistance levels become support level (the orange line at $8,353), a classical role reversal or retest situation!
3. The trendline since 17. May, pulled from the wicks and having three touches. A bit subjective but it matches with this area and in overall it should act as a price supporter.
4. Channel (Bull FLag) bottom trendline should act as a support level and it matches also with our crossing area inside the blue box. Channels are usually parallel and the bottom channel trendline is a copy/paste from the upper trendline.
5. Fibonacci retracement 38%
6. Fibonacci retracement 62%
7. 1H EMA 200 is inside the box which should act as a support level
8. 4H EMA 50 is also inside the marked area and should act as a supporter.
As you see, this is actually a very strong price level. Multiple indications are matching each other inside the blue box at $8,250 - $8,430.
As always, perfect would be a bullish candlestick pattern on some of the higher timeframes (1H+)
Alert: Just below the blue box is a red area. If the 4H candle gets a close inside or below the red area then you should be very cautious. The trendline and the strong price levels get cracked after the close around the red area and this can be pretty nasty. So, watch out if the 4H candle gets a close inside or below the red box.
Bullish breakout - Bull Flag
The prementioned descending channel is actually a bullish/continuation chart pattern Bull Flag. The Bull Flag gets confirmed after the candle close above the upper trendline. The upper trendline is actually a counter trendline (small down-trendline) and if this breaks then those counter trendline breaks have guided the price multiple times into the bigger trend direction. So, wait for a breakout from the Bull Flag which should confirm further movement upwards. Better is a 4H candle close confirmation above the upper trendline! The pattern target and some waves can guide the price into my last target area around $10,000!
"If you asked me to distill trading down to its simplest form, I would say that it is a pattern recognition numbers game. We use market analysis to identify patterns, define the risk, and determine when to take profits. The trade either works or it doesn’t."
– Mark Douglas
Feel free to support my idea post by hitting the "LIKE" button, it is my only fee from You!
Have a nice day,
Cheers!
Note
Just in case, a little bit closer look:Note
My alert was: "Watch out if the 4H candle gets a close inside or below the red box".Yesterday, the price made pretty manipulative price action, actually, we haven't seen those moves for a while but this is a Crypto market and those moves can't surprise us anymore. The price found resistance from the round number $9,000 and it bounced back and stopped exactly on my marked bounce area.
It is really on the edge right now but still capable to climb upwards because we haven't seen a 4H candle close inside or below the red area. The price has touched it a couple of times but currently/luckily we haven't got 4H candle close inside the box. So, the bounce area is still alive and it becomes more secure if the price can move back above the $8,400.
Currently, it has fallen just a little bit too deep but as said still on the possible bounce area and keep in mind if it starts to go lower from here then watch out! It has to climb above $8,400 to escape from the further drop!
I try to keep you posted!
Note
At the moment, we have to look at lower timeframes - 15 min chart:The lower orange line has worked previously as a 4x resistance level, currently, the price has got a bounce from there two times and this is our biggest support line.
Now the trendline, if the price gets lower then this then you should be very careful. The down pressure is pretty heavy and soon we might get a confirmation 4H close inside the red area if the price can't climb higher from those levels.
Stay really focused and be very cautious!
Note
The trendline held the price and at the moment I can say - Perfect!The bounce has occurred on the mentioned area and let's see how high it can guide the price or is it just a small pump.
Surely we need some confirmations from the 1H a 4H timeframe that it stays above the mentioned $8,400 which was the safer area.
The 4H candle drifted just around the red area but currently, the mentioned crossing area worked out really nicely, let's see...
Note
4H chart:To be more precise, the price has to crack and stay above the higher orange line and above the trendline.
Regards!
Note
New BTC analysis:
Best regards and do not forget to hit the "LIKE" button!
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