BTCUSD - Drop to 3k USD or bullish continuation?Hey everyone!
This is my first analysis and I am very new to technical analysis, so 'bear' with me. Here is the daily chart, since the two are very much complementing each other:
The chart is scaled logarithmically, since it gives a better picture of what happened in the past over the linear chart.
What worries me the most are the insanely low support levels given by the ichimoku cloud. While we have never went down to ichimoku support levels, it would still allow a retracement to the September dip to 3k USD.
We can see that past cycles of slow upwards movement to sharp dip were around 60 days long. We may have completed such a cycle with the current dip or we might see a larger super cycle forming that does not obey this pattern.
The MACD is painting a grave picture and seems to point towards the latter scenario. However the MACD bounced right before crossover at the end of the November and September cycles.
The ADX may be pointing downwards, but at levels above 40 is still indicating strong price movement. +DI is going down while -DI is going up. In the past they rarely crossed over, but instead bounced off each other. Let's hope this is the case.
Let's look at the daily chart.
We broke through the Ichimoku cloud. This has happened before, but not to such an extent. At best this gives us a resistance at 13-14k, at worst it may indicate a bearish downward reversal.
The lower border of the Bollinger Band seems to give us room for further downward movement by parallelizing with the current developement.
The MACD is pointing downwards to an extent we have not seen in the past year, eventhough it may be losing momentum.
While Stoch RSI is already over bought and ready to bounce, the RSI still has some room for further downward movement. In the past, the price never seemed to bounce before the RSI dropped below 30.
What is really worrying is the ADX indicating strong price action with the +DI far below the -DI and the two seemingly diverging even further from each other.
Fundamentals:
We have seen some heavy FUD. I suspect the expiration of futures contracts are to blame for this. Some powerful entities have made a lot of money with this dip and the FUD from the political side came just in time for that.
Call me paranoid, but I smell market manipulation.
Alas there is a new stack of future contracts expiring on the 26th of January. Look out for further FUD in the next week and be ready to go short.
Summary:
Our indicators are giving off very mixed signals, bears seem to be taking control though. If this was any other coin, I would go short. With BTCUSD however, we have seen this pattern at the end of every 60 day cycle which gives me some hope. I will hold for now.
We can't be sure that the current dip merely marks the end of another 60 day cycle. It may well mark the end of a super cycle. Especially the MACD of the weekly seems to suggest the latter.
If I should take a wild guess, I would assume a dead cat bounce to 14k in the coming week and a sharp drop to much lower levels of 8k, at worst 3-4k towards Jan 26. With more future contracts expiring we might also see a salami crash to 3k USD within the coming months. The underlying motor will possibly be both Political FUD and the public's realization that BTC is not a feasible payment option.
Please excuse the poor choice of colors. I am severely color blind.
Also remember that I am a total noob when it comes to technical analysis and speculation in general. I have made some excellent calls on shit coin price action, but BTC is a tough one.
