Bitcoin Still Waiting for that High Volume low

Updated

In my previous analysis i said the following: The 4000ish level can be tested as well, rather see it stay above the 4050/4100, showing some inpatient buyers wanting to get in (who do not want to wait for the 4000 or lower levels). We have resistance levels around 4500 and 4700 now. So far this has played out and we are still inside this range as well. However we have not made that high volume V shape low, which would indicate this might be over.

The past few hours we have made a small breakout, as we can see on the left but there is no volume at all. This usually makes the price drop again. The low volume shows their is no support for this move up, because it makes the support zones very fragile because of this. There is room up until the 4750 even but i highly doubt if we will get above that level if the volume stays like this. I think we might not even get above the 4650ish with this low volume. If we start to see many hours of sideways movement between the 4400 and 4600 zone and make small bounces up from that trend line as i illustrated on the left, i think we will make a big dump again. This is just a scenario i plan ahead, so if we see something like this happen i will probably trade it. What i hope to see if we make another dump is to see a good high volume V shape low, meaning dropping 500/800 points and bouncing up almost the same amount. So not the bounce we had yesterday, because that one was too slow and without any conviction or volume.

On the right we can see another scenario which is a big bear flag. I see this happening if we do move higher towards the 4800 but with slow low volume movement. If we see that happening i will probably short it around those levels after seeing some rejection happening. In this scenario i want to see a similar thing as i mentioned above, also seeing a big panic dump. We should not see the target of this bear flag getting reached though, because that would mean we will drop to the low 3K' levels. I don't think things will go that fast, because that would need extreme panic to happen. What the bulls want to see, is a break of the flag make a big drop below it and then seeing buyers stepping in and pushing the price up to create a short squeeze. Until we see this moment happen, where bears really start to burn their hands, we will remain in these bearish zones.

Open Interest on Mex' is finally increasing a bit again, showing interest in the market is very slowly increasing again, but it's still a low number. We should not think about the 700/800 mil numbers, because the price is much lower, but 400/500 mil would be good. Open longs on Bitfinex are increasing a bit and the shorts as well. So there is no sign of money leaving this market, which is good since Tether' caused a lot of uncertainty the past 2 months.

For more information, please read my previous analysis to know my thoughts and view of the current market conditions.

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Previous analysis:

Bitcoin Panic Selling has Started, Target Overreaching

Note

Now these wedges are not great, but this also on of the reasons why i kept saying the volume is so important at the breakout of that trend line in the previous analysis. The volume picture does confirm a possible bearish wedge. But when zooming in, it's not the perfect wedge. But at least good to have it in mind

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Here we see again, how important volume is during breakouts. Something i kept mentioning several times in the last few updates of my previous analysis. Now it is following the blue line of the left chart. At the moment it is on a support level again, same one we bounced up from yesterday. I think if this one breaks, me might see acceleration down. So be aware, not saying it will happen but it it likely.

Note

Small bounce, just now, but as i described above, if we see small bounces up from that trend line, it will probably be just a matter of time until we break down. The same happened at the 6300/6400 just before the crash started. There i also said it was a very big sign of weakness, we have seen the result of that. So i think a break of that new trend (resistance) line might be a good level to break for the bulls, to prevent a drop again.

Note

So bounced up again from the same support level as yesterday. The (possible) wedge is still in play, a break of 4600ish will invalidate this wedge.

If we see another bounce from that blue level on the right, there might be a good chance that the bulls will give it another attempt to break that resistance. It even looks like a small inverse H&S. Bears are still in favor, above that trend line would make things more neutral again.

So the 4600 and 4350 are the levels to watch for now.

Note

Still low volume

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Volume is slowly increasing now and what looked like a failed inverse H&S, is forming again. These type of H&S usually fail, but not always. The only way this one can succeed is a good solid push up with high volume. So that red resistance zone is the level to break. I think if they can't do it within the hour, it will probably fail

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Target of this possible inverse H&S is around 4580, yesterday's high

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And the low volume caused the inverse H&S to fail. There with that attempt it really shows some bulls tried to move higher, but the low volume shows us there are not enough people sharing the same view. In other words not enough buying volume. When it takes too long (as i mentioned above that i gave it 1 hour), the bears usually take over. This are not always bears, but can also be bulls getting scared and start to sell what they have because they get scared. So now we have another level to look at, that's around 4480. For the bears it's still the green support zone around 4350. If that breaks, we could see an acceleration down

Note

There we have the acceleration, Bitstamp dropped 50 points more that the rest btw. Now we could make another dump from the looks of it. It's either making a higher low around 4200 or make that drop towards the 3900/4000. The target of that wedge has not been reached so chances are higher for more downwards movement

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A follower asked me to talk about this, he posted it below in the comment section, but i am honestly not aware of what was going on here. But thought might be good to get it some more under the attention. I don't know the facts, so i can't give an opinion about it myself

cointelegraph.com/news/binance-freezes-funds-with-suspected-money-laundering-links-from-controversial-exchange-wex

Note

There is small inverse H&S in the making, it could simply fail here, but if the neckline breaks we might see a move up to test the former support. I think it's most likely that of these 2 will play out. The blue line on the right could happen, but it is not very likely, it would need a lot of buying volume it would probably trigger a reversal if we go towards the 4600 and even manage to break that one. Those resistance levels wont be easy to break, i think only a squeeze can make that happen.

Note

Made a potentional double bottom low now at 4100/4050, even though the bounce up was decent, it is dropping slowly again and from that resistance level, an important one that bulls should have broke through.

So i think the range can be moved to 4050 and 4400. If the 4200ish can hold, there might be another chance to turn up. I still think bears are in favor

Note

The bulls have turned it around a bit and are making another attempt to move up. Making a higher low, but it will only be confirmed if it breaks that red zone around 4400. I see a few options here:

Simply make a lower high, when volume really fails
Break the resistance but also with very low volume.
(both red lines).

The only real bullish version, is a real break of that red zone and make a small squeeze up (blue line). If we don't see a move like this, it will probably move slowly down again.

Now what we should not forget is, the fact it's almost weekend again. The past month or 2 nothing happened during weekend except for fake small moves up and down. So where i thought yesterday we could accelerate down to the 3900, probably won't happen until Sunday. So unless we see a big drop in the coming 6 hours or so, we will probably won't see any big moves happening.

Note

No surprise that we did not make a big drop with the weekend being so close. Target of that wedge was reached yesterday and we have since been bouncing up and down between the 4200 and 4380. On the right we can see a channel, from which the chances are higher for a break of support than a break up. But if we break up, the chances are more likely to see support from that green zone around 4270. Think the bulls might make another attempt around that level.

At the moment there is still a lot of resistance around this 4350/4400 zone. A break of this level could bring us towards the 4600. But same story as the previous update, without higher volume and a small squeeze, think it will just be a matter of time until we drop again. At the moment we can see the volume has been low today, which is a sign of weakness, but the volume is increasing slightly the past few hours, so there is a chance it might increase more. I don't like make predictions during weekends anymore, because we it's always PinpPong time. I am not expecting any big moves this weekend and probably see the direction again when Asia opens on Monday.

Still have the same support and resistance levels as mentioned in previous updates. Not much to add. One positive note, OI in Bitmex is increasing slowly, showing there is some confidence coming back. But still a very long way to go.

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Still looking bad, could be a wedge even, which could bring us to the low again

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It is also moving inside of a channel at the moment, this could save it from dropping as the wedge is suggesting. If it wasn't weekend, it would be an easier decision about the wedge. What is very likely, is if a drop below this channel happens, the wedge will probably play out.

Just don't forget it's weekend, usually PinpPong movement.

Note

That channel is still in play and the wedge as well.

On the left we can see something a bit more worrying. The past week or so i thought this movement could be turning into a bullish wedge, giving a bounce up to 4800 or maybe even 5500. But it is starting to look more like a big triangle. It can always breakout both ways, but in this bearish weak sentiment (of alts as well), a break on the downside has the bigger chances. A bear trap move is also still possible, just like i showed in my original chart. But when i made this analysis i had the wedge play in mind, not this triangle.

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There is a chance for a inverse H&S, like the blue line. But the past 2 weeks this happened a few times, and all the times the red version played out.

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