Bitcoin - Classical Triangle consolidation
Updated
Based on the bars for this week we can see that Bitcoin entered its classical triangle consolidation, which can continue for the next week, and then we could face the breakout. In this review, we will analyze the possible scenarios for the bitcoin price and will show our ideas on how to trade in them.
Based on the weekly chart, we can say that the short position is not a priority. The current bar is closing on a very high volume (The highest since the 16th of March 2020) but the price movement of the bar is not significant (Around 6% from the week opening). The daily chart also shows the buying power as soon as the price is reaching the level of 32000$-35000$. These two facts suggest that there is no significant pressure from the sellers at the moment. It looks like next week we should expect a further decrease in volatility and consolidation within the triangle.
Possible scenarios:
1) Breakout to the upper side of the triangle. This scenario is possible if during the week we would continue to see the buying power when the price deeps below 35000. The ideal breakout would be to the region of 39700 and then a local consolidation at this level with a further increase to the ATH and maybe higher.
2) The breakout to the lower side of the triangle. This is possible if the price would start consolidation below the level of 35000. This will probably happen fast and would be accompanied by the stop-loss hunt and the two primary targets would be 29600$ and an unlikely scenario of 25900$. At the moment we consider this type of breakout as a manipulation before the market will try to reach the all-time high level again.
3) Further decrease in the volatility and the formation of the horizontal channel. This is possible if the large players will decide to either start fixing some of the amounts or adding to their current positions and will keep the market in range.
The overall conclusion:
We will be looking for long opportunities and entry points in the coming weeks putting the limit orders at the level of 32K and 29K in case of the stop-loss hunt. We will monitor the other entries based on the 4H chart based on the 200 MA as support.
Based on the weekly chart, we can say that the short position is not a priority. The current bar is closing on a very high volume (The highest since the 16th of March 2020) but the price movement of the bar is not significant (Around 6% from the week opening). The daily chart also shows the buying power as soon as the price is reaching the level of 32000$-35000$. These two facts suggest that there is no significant pressure from the sellers at the moment. It looks like next week we should expect a further decrease in volatility and consolidation within the triangle.
Possible scenarios:
1) Breakout to the upper side of the triangle. This scenario is possible if during the week we would continue to see the buying power when the price deeps below 35000. The ideal breakout would be to the region of 39700 and then a local consolidation at this level with a further increase to the ATH and maybe higher.
2) The breakout to the lower side of the triangle. This is possible if the price would start consolidation below the level of 35000. This will probably happen fast and would be accompanied by the stop-loss hunt and the two primary targets would be 29600$ and an unlikely scenario of 25900$. At the moment we consider this type of breakout as a manipulation before the market will try to reach the all-time high level again.
3) Further decrease in the volatility and the formation of the horizontal channel. This is possible if the large players will decide to either start fixing some of the amounts or adding to their current positions and will keep the market in range.
The overall conclusion:
We will be looking for long opportunities and entry points in the coming weeks putting the limit orders at the level of 32K and 29K in case of the stop-loss hunt. We will monitor the other entries based on the 4H chart based on the 200 MA as support.
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The two levels that we were looking for in the stop loss hunt were reached: The amount was equally distributed between the two entry targets (32K and 29K) giving an entry price of 30500. The first take profit will be around 34500 where we will take 30% off the position and move the SL to the entry point of 30500. The level of 34500 is a mirror level and should act as a resistance. If it will be broken it will confirm the manipulation. If the level will hold and the retracement from that level will be more 70% then we may consider swinging the position.
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