Bitcoin Consolidation Fractal Before Its Next Massive Breakout
Updated
Thanks for all the comments and likes on my last analysis here.
It played out quite nicely from that lower zone. I have not yet sold my spot holdings as we are in a bull market and I don't think that the rally is over yet.
Here is a new analysis as to what may transpire over the next 7-10 days as Bitcoin consolidates in this upper range.
The last rally from Bitcoin is giving us a potential pattern to follow for when to get back in on Bitcoin.
The 200EMA on the 4 hour was the previous 'consolidation' zone before the next leg up in June of 2019.
We had a strong move to the downside to take out longs, an impulse to the topside to set a range high and one more slow bleed to the downside as shorts started piling in and resetting the funding on derivative exchanges.
It may take 7-8 days of consolidation for it to break back out, but I wanted to get this analysis out in case we see something very similar here.
Funding Rates
Ideally, we see a funding reset like we aw before where the funding goes from positive (longs paying shorts) to negative (shorts paying longs).
This gives us more fuel to push to the upside as shorts become vulnerable to a short squeeze like we saw on the initial break out.
If you miss the first entry.
If we do get the break down and the consolidation... a secondary entry is when we break above the current range high and retest it, similar to here.
These are often safer entries as you avoid the chop.
It's also possible that Bitcoin breaks back into it's previous range and consolidates to push up again like this.
What about alts?
The last time Bitcoin consolidated in the uptrend, bitcoin dominance stayed pretty neutral and allowed alts to move nicely.
When Bitcoin finally broke out of the consolidation range, bitcoin dominance went up about 25%, causing significant sell offs in altcoins.
Dominance is currently in a downtrend, so we need to see what happens when we break out of this range.
Where do you sell and what's the stop loss?
Based on weekly resistance levels, the best levels to sell at are $13,870 (also the former range high from 2019),
The stop loss would be a break and close below the 200EMA on the 4 hour to find the next set-up.
Invalidation of this idea would be a breakout and close above the range high $12,000 zone first.
As always, this is not investment advice. Just another analysis to help guide our decision making process.
It played out quite nicely from that lower zone. I have not yet sold my spot holdings as we are in a bull market and I don't think that the rally is over yet.
Here is a new analysis as to what may transpire over the next 7-10 days as Bitcoin consolidates in this upper range.
The last rally from Bitcoin is giving us a potential pattern to follow for when to get back in on Bitcoin.
The 200EMA on the 4 hour was the previous 'consolidation' zone before the next leg up in June of 2019.
We had a strong move to the downside to take out longs, an impulse to the topside to set a range high and one more slow bleed to the downside as shorts started piling in and resetting the funding on derivative exchanges.
It may take 7-8 days of consolidation for it to break back out, but I wanted to get this analysis out in case we see something very similar here.
Funding Rates
Ideally, we see a funding reset like we aw before where the funding goes from positive (longs paying shorts) to negative (shorts paying longs).
This gives us more fuel to push to the upside as shorts become vulnerable to a short squeeze like we saw on the initial break out.
If you miss the first entry.
If we do get the break down and the consolidation... a secondary entry is when we break above the current range high and retest it, similar to here.
These are often safer entries as you avoid the chop.
It's also possible that Bitcoin breaks back into it's previous range and consolidates to push up again like this.
What about alts?
The last time Bitcoin consolidated in the uptrend, bitcoin dominance stayed pretty neutral and allowed alts to move nicely.
When Bitcoin finally broke out of the consolidation range, bitcoin dominance went up about 25%, causing significant sell offs in altcoins.
Dominance is currently in a downtrend, so we need to see what happens when we break out of this range.
Where do you sell and what's the stop loss?
Based on weekly resistance levels, the best levels to sell at are $13,870 (also the former range high from 2019),
The stop loss would be a break and close below the 200EMA on the 4 hour to find the next set-up.
Invalidation of this idea would be a breakout and close above the range high $12,000 zone first.
As always, this is not investment advice. Just another analysis to help guide our decision making process.
Trade active
Currently in the buy zone sitting directly on the 200EMA.We may get one more push up and retest before the break and go.
Starting to see funding tick a bit negative and sentiment start to shift to bearish.
Invalidation is very close here, so it's a great RR set-up as long as bulls can hold the $11,200 level on a daily candle.
Note
So far. So good.
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