Short

Bitcoin at the Critical Level Again?

Updated

The last few days, all I hear about it is bragging from traders and investors that they "bought the dip." The drop is over. That was easy. Don't sell at the bottom. Just buy! buy! buy!

It's a good plan if you are investor. At some point, I think bitcoin goes higher. But if you are trading bitcoin, its not so easy.

The move from 17k to 9k is a big move. With that kind of momentum, its not likely to be over so fast and easy. The daily chart needs to make a run, dip then make a new high above 13k. Then we can talk about a trend change. But so far, we are in a bear trend so we have to be prepared for lower prices.

Today Bitcoin was rejected at the $13,000 area. So what happens?

If Bitcoin can keep attacking then it could go higher. But then I think top of the triangle trendline becomes resistance and the 61.8% fib becomes a target around $14200. But I would expect us to still test lows before going higher.

If it moves down from here, then it could hold 10k then that would give us some resolution and allow bitcoin to go back into consolidation range and potential make a higher high on the daily.

Otherwise, the possibility of going lower is still on the table.

I still believe Bitcoin is in a monthly bull market and it will end up making new highs. I just think that after a monster run 2017, its not going to be over this quickly. its healthy for the market to dump some of the speculation and get some fresh new buyers in at lower prices.

So as a trader, this area is a place to take a short with a stop at $14500. Target of $7500-$8500. If we get above that $14500 area then I can consider going long.

Note

Bitcoin has just chopped around in this range between 10k and the last 10 days. Now its a sitting on a trendline support.

If this area doesn't hold then we revisit the 10k range and that ends up being the 4th time we visit that area. The more we test it the weaker it gets. I would be surprised if 10k holds.

If this market goes down then that 200 DMA around $7500 is an ideal spot to test. It would be healthy to go down there. Knock out all the panic sellers and pickup fresh new buyers.

Note

Should have said $10 and

Note

Price action today has shown incredible weakness. Again, I would be surprised if it holds. If support collapses, I will be looking for $7500 to $8500 within the next 3 days. It very well could end up spiking down and recovering fast.

Note

We had a 9 candle series down on the 4 hour. We should have some consolidation for another 2-8 hours and then we'll see whether the market is ready to turn. There's a trend line resistance around 10300-10400 and price resistance back up at 10700. Those would be areas to revisit before bitcoin tries to go down. If we get past that area then it seems like testing is in order to see if the big descending triangle is in play.

Note

We hit that 8500 area but its been a fast drop so it might consolidate from here or possibly hit that top triangle trend line before going down again. But we have multiple support areas and the 200 DMA right below us so its more likely to hit that range first before it starts a new bull market.

And of course, we could enter a long term bear market. I don't think that will happen but have to be ready for it.

At this point, we just watch and wait and see what kind of clues we get from price action.

Note

We are on a panic, but right in the buy target area. It's also pritning an 8 on a TD signal on a 4 hour chart. 8 and 9 have a high likelihood of being the bottom. But that doesn't mean that it couldn't really sell off hard before it finds a low. A few chocies.

1. Buy here as a long to mid term hold and ignore any further downside. (riskiest)
2. Wait until you at least see a reversal on the 1 hour chart. Safer yet, the 4 hour chart. (safer)
3. Just sit back and wait to see exactly what happens with price action and market structure, then determine if you want to buy.

I personally do a bit of all 3. I have some buys in just because big sell offs can aggressively turn, so I want to get some positions. But I'll wait for a reversal signal to buy more

rzmb44

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