Bitcoin at major resistance that most will probably miss
Updated
I have the bitcoin chart on the left and the ethereum chart on the right. Bitcoin is primed to go through one of the core but often missed patterns in trading. The lead in line in black was support for months and some clear bounces are shown with the black arrows. The line is slipped as support in dramatic fashion at the blue arrow and asserted as resistance at the orange arrow. The pattern played out clearly in etheureum and has a high probability of playing out on bitcoin within days. The black circle on the bitcoin volume histogram shows that despite the spikes in buying volume days overall volume in this uptrend is falling. Generally falling volume is a sign that an uptrend is going to reverse.
Ethereum's prices action fell to between the 0.618 and 0.786 fib retracement levels but the wedge was clearly more downward pointing than what we see developing on bitcoin. I colored both retracement levels in red but with the angle of bitcoin support right now it certainly does look like the retracement, if it occurs, will more likely than not go to between 0.50 and 0.618. A break of the bitcion wedge support would be a major break of market structure and extraordinarily bearish.
The only reason I can see bitcoin pumping right now is because the smart money is waiting to short at the orange arrow. Smart money is waited to sell and right now price action is just above the 0.236 level retracement level. Looking back in October that level was wicket pretty hard and price action fell right to the .050 level.
Further that, Bitcion and ethereum are often correlated over 95% so if ethereum/bitcion is falling then generally both are falling, but ethereum is falling quicker. So below is the ethereum/bitcoin chart and it seems like a safe bet that the price action will retrace to the bollinger band base line. Price action hit the 3rd standard deviation and that is a great sign that we found a top.
Ethereum's prices action fell to between the 0.618 and 0.786 fib retracement levels but the wedge was clearly more downward pointing than what we see developing on bitcoin. I colored both retracement levels in red but with the angle of bitcoin support right now it certainly does look like the retracement, if it occurs, will more likely than not go to between 0.50 and 0.618. A break of the bitcion wedge support would be a major break of market structure and extraordinarily bearish.
The only reason I can see bitcoin pumping right now is because the smart money is waiting to short at the orange arrow. Smart money is waited to sell and right now price action is just above the 0.236 level retracement level. Looking back in October that level was wicket pretty hard and price action fell right to the .050 level.
Further that, Bitcion and ethereum are often correlated over 95% so if ethereum/bitcion is falling then generally both are falling, but ethereum is falling quicker. So below is the ethereum/bitcoin chart and it seems like a safe bet that the price action will retrace to the bollinger band base line. Price action hit the 3rd standard deviation and that is a great sign that we found a top.
Note
I am using the 2d chart to fit a bit more data and to combine some candles so you don't have to do it mentally. We are clearly stalling at my rising orange trendline. There has been some fine tuning but mostly at the origin.If we impuse down powerfully past the rising blue trend line, as I have said elsewhere, it is basically game over for bitcion and we can go sub-$1,000. If price action finds the blue line as support then it is to 30k, easy.
The final option is price action mounts the long term resistance without a significant dip, the trend line flips to support (or a horizontal level flips to support and we are off to the moon.
I am in my short, I have my stop outside both trend lines, hopefully I am safe for this dip and can take some decent profits.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.