Comparing Trends on Coinbase & Bitstamp - (Where's The Volume??)
Updated
I find this interesting. Over the last day or so, Bitcoin has just barely been able to get back above its long term bullish trendline (pink on the Coinbase chart). Zoom in to see it more closely. I initially posted about this on my recent short term analysis, but I wanted to make a separate post about it. I don't often post potential short setups for Bitcoin (and this isn't really a setup), but I'm trying to stay objective, since I think there is substantial risk for drop. May not play out, since we've been consolidating between 7K and 8K+ for a while, and bulls have shown a lot of resilience. Volume keeps decreasing though, which leaves the possibility open that we are actually forming a bearish wedge that could turn into a nasty head and shoulders breakdown if buying volume can't come in to support prices. 
The immediate target for that head and shoulders, should it come to fruition, would be in the $6400 area. That would also send us well below the long term uptrend on Coinbase.
If one is actively trading, staying on the sidelines is probably a good idea at this point. The first target for my short term bullish play has just barely been reached. Actually, it wasn't even reached on Bitstamp ($8300). Until $8400-8500 falls with volume, I'm not convinced of this move up (and neither are a lot of people, hence the low volume). Of course, low volume can also mean that we're simply nearing the end of a long period of consolidation. This means that it can happen at the end of a bull flag as well. But if that were the case, I'd ideally want to see volume increase along with price, which hasn't happened yet.
If we look at the Bitstamp chart, we have more room to fall, since we appear to be much further away from the long term bullish trendline (light blue). I give this one a bit more credibility, since it's based on a longer timeframe. This means we should have strong support in the $7200-7300 area, should we see some buyer exhaustion and more selling. As you can see, I also drew the potential bearish wedge on this chart.
One thing that concerns me is that during our January/February bottoming period, the Coinbase chart would generally be the leading indicator - meaning Bitcoin would break diagonal resistances on Coinbase first. I was using a lot of long term resistance lines to gauge whether or not we had broken out (and also whether it was safe for me to add some more fiat to the market). This ended up working, as we all know what happened from February to April. You can see a bunch of the lines I was using still on this chart. If Coinbase is going to act as a leading indicator in the OPPOSITE direction, it may tell us that we really have reached a top. Additionally, Litecoin has reached and surpassed my final target of $130.
Just wanted to post this, since after my short term bullish analysis, things are starting to look a bit weak. There is a chance for price to move up as well, but we need to see some convincing volume follow through on the recent move up. Below, I'll link some posts where I talked about Coinbase versus Bitfinex, and how I was able to time the breakout from the bottom. This is not financial advice - it's for speculative and educational purposes only.
You can now follow me on Twitter @thevictorcobra
-Victor Cobra
The immediate target for that head and shoulders, should it come to fruition, would be in the $6400 area. That would also send us well below the long term uptrend on Coinbase.
If one is actively trading, staying on the sidelines is probably a good idea at this point. The first target for my short term bullish play has just barely been reached. Actually, it wasn't even reached on Bitstamp ($8300). Until $8400-8500 falls with volume, I'm not convinced of this move up (and neither are a lot of people, hence the low volume). Of course, low volume can also mean that we're simply nearing the end of a long period of consolidation. This means that it can happen at the end of a bull flag as well. But if that were the case, I'd ideally want to see volume increase along with price, which hasn't happened yet.
If we look at the Bitstamp chart, we have more room to fall, since we appear to be much further away from the long term bullish trendline (light blue). I give this one a bit more credibility, since it's based on a longer timeframe. This means we should have strong support in the $7200-7300 area, should we see some buyer exhaustion and more selling. As you can see, I also drew the potential bearish wedge on this chart.
One thing that concerns me is that during our January/February bottoming period, the Coinbase chart would generally be the leading indicator - meaning Bitcoin would break diagonal resistances on Coinbase first. I was using a lot of long term resistance lines to gauge whether or not we had broken out (and also whether it was safe for me to add some more fiat to the market). This ended up working, as we all know what happened from February to April. You can see a bunch of the lines I was using still on this chart. If Coinbase is going to act as a leading indicator in the OPPOSITE direction, it may tell us that we really have reached a top. Additionally, Litecoin has reached and surpassed my final target of $130.
Just wanted to post this, since after my short term bullish analysis, things are starting to look a bit weak. There is a chance for price to move up as well, but we need to see some convincing volume follow through on the recent move up. Below, I'll link some posts where I talked about Coinbase versus Bitfinex, and how I was able to time the breakout from the bottom. This is not financial advice - it's for speculative and educational purposes only.
You can now follow me on Twitter @thevictorcobra
-Victor Cobra
Note
Just to add, since I ran out of time to edit, IF bulls can hold the line and come in with volume (ideally breaking above $9000 in one big move), we can target the top of the bullish channel - $11800 on Bitstamp.Note
Oh also, here's the trendline on Bitfinex. It appears it has perfectly held as support (so far) this week. This is actually the most bullish looking Exchange, and has been for a long time. Zoomed in:
Note
Getting a bit more volume on this next push up. In order to invalidate the wedge and cause a bunch of FOMO, we'd need to get convincingly up above $8330, ideally. Note
We're still in the wedge and PERFECTLY nailed the bullish target at the top ($8330), but we have an interesting development now. Volume is starting to increase again. Normally when a wedge is reaching the apex, it should be at the lowest volume. That's not the case here. For this reason, the picture is actually starting to look slightly more bullish. Additionally, alts are starting to sell off back into Bitcoin, which has recently been a bullish indicator as well. We'll see what happens! Note
We are possibly breaking the wedge to the upside. Note
Very interesting! Note
Head and shoulders may become invalidated as well. Anyway, have to head out for now, but we have some bullish developments today :)Note
Obviously need to hold above the wedge to confirm that this isn't a fakeout move. Alts are dropping pretty hard on their ratios.Note
And there you have it. Bitcoin has invalidated all bearish patterns, and has confirmed that it wants to move up. New high as well. I was initially expecting something like this to play out, but the low volume had me confused for a moment. The ideal trade would have been to buy again once $8330-8400 broke. The second target for my long trade setup has been reached and surpassed (9K)One thing I want to know....who's shorting this thing??
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