BTC Thoughts
Market: BTC is in a correction that we have seen many times. It is not yet time to panic as BTC has shown numerous times in the past that healthy corrections are due after run-ups. This is a young market and when hundreds of billions of dollars come into the market in a matter of weeks or months then a correction will follow, especially when a lot of those people only got in to make a "quick buck" so they panic sell at the first sign of despair. Add in the closure of CBOE futures today at 4PM EST and you have a storm of things going on, on top of the Korea and China FUD.
EMA: Starting with the 150EMA. This has been a strong support level for BTC for over a year now and today marks the 5th time in the past year (give or take 6 days) we have touched this line. The previous 4 times we have hit the 150EMA we have seen roughly an average continuation of the trend of 184% price increase from the spot of the 150EMA touch until the next high in a matter of 69.5 days on average. To put that into perspective, based on the past 4 results...not adding in the exponential nature of their increase and the rise of BTC, that would put BTC at a price of 27,500 by the end of March. The last 150EMA touch lead to a bullish trend that lasted 93 days and was a 470% price increase to our previous all time highs near 20k.
Ichimoku: The current setup most resembles the July setup.
TK: The previous four corrections all showed up nicely on Ichi as well. We saw a bearish TK cross occur just before, during or just after the 150EMA touch (which was the bottom of the correction each time) only to be followed by a bullish re-cross an average of 15 days after the original bearish cross. We saw the bearish TK cross occur yesterday just before the 150EMA touch today.
Cloud: I would like to see us remain in the cloud, a close below the cloud would be bearish so the 11.3-11.4k level is significant. In July we saw a touch and close at the bottom of the Kumo cloud like we had yesterday and the reversal followed off Kumo bottom...a close within the cloud would be a good sign.
The cloud still remains green as there has not been a Kumo twist and the lagging span is still above the cloud. The span is in price which shows consolidation and the short-term drop off we are seeing.
RSI/SRSI: We are nearing oversold positions on the RSI but the glaring part on the RSI is the bullish divergence. We see price making a higher low however, the RSI is making a lower low meaning the high volume of selling is not able to push the price lower than where we previously have been. The sellers are beginning to get exhausted while price is not falling to previous levels.
Previous bottoms also show that the SRSI and the RSI were in very similar spots they are currently sitting in. Massively oversold on the SRSI and nearing oversold on the RSI (30). The RSI has seen a bounce off the 30, or just prior to the 30, each time the previous 4 times we have been here.
What is needed: BTC needs strong buying volume. A few solid green volume bars should be able to get BTC back on its uptrend. Previous corrections have reversed with strong buying volume and that is what is needed here. We have a lot of selling volume, but the good news is price is not dropping below the mid-November dip where we see the bullish divergence line drawn to. A few buying days should reverse the RSI (which would bounce off of 30) and we would likely see a KD cross on the SRSI leading it out of oversold. That would begin us on the same track we have seen BTC take 4 other times. I am not bearish unless BTC falls below the 150EMA and then 7500 would be the likely next stop.
EMA: Starting with the 150EMA. This has been a strong support level for BTC for over a year now and today marks the 5th time in the past year (give or take 6 days) we have touched this line. The previous 4 times we have hit the 150EMA we have seen roughly an average continuation of the trend of 184% price increase from the spot of the 150EMA touch until the next high in a matter of 69.5 days on average. To put that into perspective, based on the past 4 results...not adding in the exponential nature of their increase and the rise of BTC, that would put BTC at a price of 27,500 by the end of March. The last 150EMA touch lead to a bullish trend that lasted 93 days and was a 470% price increase to our previous all time highs near 20k.
Ichimoku: The current setup most resembles the July setup.
TK: The previous four corrections all showed up nicely on Ichi as well. We saw a bearish TK cross occur just before, during or just after the 150EMA touch (which was the bottom of the correction each time) only to be followed by a bullish re-cross an average of 15 days after the original bearish cross. We saw the bearish TK cross occur yesterday just before the 150EMA touch today.
Cloud: I would like to see us remain in the cloud, a close below the cloud would be bearish so the 11.3-11.4k level is significant. In July we saw a touch and close at the bottom of the Kumo cloud like we had yesterday and the reversal followed off Kumo bottom...a close within the cloud would be a good sign.
The cloud still remains green as there has not been a Kumo twist and the lagging span is still above the cloud. The span is in price which shows consolidation and the short-term drop off we are seeing.
RSI/SRSI: We are nearing oversold positions on the RSI but the glaring part on the RSI is the bullish divergence. We see price making a higher low however, the RSI is making a lower low meaning the high volume of selling is not able to push the price lower than where we previously have been. The sellers are beginning to get exhausted while price is not falling to previous levels.
Previous bottoms also show that the SRSI and the RSI were in very similar spots they are currently sitting in. Massively oversold on the SRSI and nearing oversold on the RSI (30). The RSI has seen a bounce off the 30, or just prior to the 30, each time the previous 4 times we have been here.
What is needed: BTC needs strong buying volume. A few solid green volume bars should be able to get BTC back on its uptrend. Previous corrections have reversed with strong buying volume and that is what is needed here. We have a lot of selling volume, but the good news is price is not dropping below the mid-November dip where we see the bullish divergence line drawn to. A few buying days should reverse the RSI (which would bounce off of 30) and we would likely see a KD cross on the SRSI leading it out of oversold. That would begin us on the same track we have seen BTC take 4 other times. I am not bearish unless BTC falls below the 150EMA and then 7500 would be the likely next stop.
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