Bitcoin 3 Day chart very controlling, very bearish
Updated
The more I trade the more I try and see what time frame should be controlling based on the stage of the move and what energy level I have to keep up on the trade. Right now with us deep in the symmetrical triangle and this being our third contact the 3 day seems like a good place to be for what we see on the indicators.
BTCUSD's rally to 13,875 in June put us out of the 3rd standard deviation bollinger band (not shown) and now we have seen price action consolidating I don't think we need to include the extra noise of having that bollinger band, especially when the standard 2 st. dev. on is working just fine. Price action is failing at long term resistance shown by the falling black trend line and previous support has become resistance with the blue trend line. I did an XBTUSD post I'll linked that was controversial to at least one person as it puts a move to 6.4k back on the table, if not lower based on some Elliot wave principles.. This stages us for a very impulsive move, and we have to guess where it will end.
There are some interesting things going on with the RSI. Since early 2019 the 3 day RSI hasn't gone below 34.23 and with the higher lows that has given us a platform of bullish divergence to see pumps. I'll be paying attention to this RSI level to see if it still holds importance as price goes down. At the 3Day or maybe lower I'll be looking for more bullish divergence when we hit the lower limit of the of the bollinger band. The RSI peaked right at the threshold of going into over-bought and so I think a move to over-sold is also on the table. The RSI going to the threshold of oversold on the 3d would be very painful for the bulls.
The MACD also shows a floor that provided a platform for a bulls to use in creating this uptrend. I'll also be watching the -518 MACD level to see if there is going to be bullish divergence again.
The volume situation continues to look bearish but I think that deserves a stand alone post, so please stay tuned for that shortly.
My personal major assumptions are
The baseline of the Bollinger Band will only hold token support
Price action will return to the lower limit
After a return to the lower limit the baseline could be stark resistance
the RSI will at least return to the 34.23 level
There is a high probability the RSI goes to over-sold and we only recover when we see bullish divergence on this 3day time frame
The MACD will have a clean bearish cross of the signal line and
The MACD has a high probability of going back to -518
This post focused on the logarithmic chart. Below is the normal scale with the lines adjusted to the points of contact. This gives us a much longer time to consolidate and it also gives us a very solid place to accumulate for the next uptrend. Some easy charting puts the a third touch of support at the blue line as well.
That sets up a battle of the different chartists, those making their biggest moves on the log chart or those on the normal chart. Below is the same chart as above when it comes to the buy box and blue resistance line. This downward break out of a multi-year formation would make the bears on the log chart extraordinarily bearish and they will be in a great deal of conflict with the bulls on the arithmetic chart. It will be interesting to watch over the next year.
BTCUSD's rally to 13,875 in June put us out of the 3rd standard deviation bollinger band (not shown) and now we have seen price action consolidating I don't think we need to include the extra noise of having that bollinger band, especially when the standard 2 st. dev. on is working just fine. Price action is failing at long term resistance shown by the falling black trend line and previous support has become resistance with the blue trend line. I did an XBTUSD post I'll linked that was controversial to at least one person as it puts a move to 6.4k back on the table, if not lower based on some Elliot wave principles.. This stages us for a very impulsive move, and we have to guess where it will end.
There are some interesting things going on with the RSI. Since early 2019 the 3 day RSI hasn't gone below 34.23 and with the higher lows that has given us a platform of bullish divergence to see pumps. I'll be paying attention to this RSI level to see if it still holds importance as price goes down. At the 3Day or maybe lower I'll be looking for more bullish divergence when we hit the lower limit of the of the bollinger band. The RSI peaked right at the threshold of going into over-bought and so I think a move to over-sold is also on the table. The RSI going to the threshold of oversold on the 3d would be very painful for the bulls.
The MACD also shows a floor that provided a platform for a bulls to use in creating this uptrend. I'll also be watching the -518 MACD level to see if there is going to be bullish divergence again.
The volume situation continues to look bearish but I think that deserves a stand alone post, so please stay tuned for that shortly.
My personal major assumptions are
The baseline of the Bollinger Band will only hold token support
Price action will return to the lower limit
After a return to the lower limit the baseline could be stark resistance
the RSI will at least return to the 34.23 level
There is a high probability the RSI goes to over-sold and we only recover when we see bullish divergence on this 3day time frame
The MACD will have a clean bearish cross of the signal line and
The MACD has a high probability of going back to -518
This post focused on the logarithmic chart. Below is the normal scale with the lines adjusted to the points of contact. This gives us a much longer time to consolidate and it also gives us a very solid place to accumulate for the next uptrend. Some easy charting puts the a third touch of support at the blue line as well.
That sets up a battle of the different chartists, those making their biggest moves on the log chart or those on the normal chart. Below is the same chart as above when it comes to the buy box and blue resistance line. This downward break out of a multi-year formation would make the bears on the log chart extraordinarily bearish and they will be in a great deal of conflict with the bulls on the arithmetic chart. It will be interesting to watch over the next year.
Note
The three day candle has about 20 hours before close but I feel confident in posting an update prior. It seems pretty clear at this point that the resistance I detaild is stronger than the uptrend and we are retracing. It seems to be very high probability that the price action continues at least to the bollinger band base line where I think we will only get token support. Lets see.
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