BTC break out in 24-48 hours, 10 days, 1 monthWow what a ride! We saw BTC test the 5 years ascending trendline twice now and both times it held, though not without a fight the first time. After touching down a second time the price went fairly viral and has been running on an impressively strong 10-day ascending trendline now. That little trendline is so strong that we broke through the top of the channel of our 6 month descending channel 4 times now! This is the most it has flirted with crossing this line since this trend started.
There is a chance this little 10 day trend could end up being a lot more but right now BTC is about to have to decide between retaining this steep run or subsiding to what appears to be a top of channel (sub descending channel) sitting in the top quarter of the 6 month descending channel(Magenta lines). There is just one catch here, the top of this sub descending channel appears to be above the top of the 6 month descending trendline. This is a very interesting formation and difficult to predict how it may impact either trend. Here are a few of the more probable outcomes and time frames I see from here. Either way we are still set for a nice run coming very soon for BTC, one similar to last year first half of the year but hopefully a bit bigger.
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#1 These Magenta rails hold the channel and zig-zag us down to the low $7k’s at by end of January. We test the 5 year trend line one more time before busting out of this (then) 7 month descending channel and the major rally starts somewhere around the first week or two of February.
#2 The top of the magenta channel combines with the historic support/resistance (yellow line) @ $7810 to create a wedge. We would then break out of that wedge as traditional somewhere around the last 30% of the shape. This route would have a break out around the 25th of January. There is a possibility that this breaks down, touches the 5 year trendline again at around $7200 and then follows the same route as #1. There is also the chance it breaks up here and we start our run around 25.Jan.
#3 This 10 day trendline has enough umph to push through this descending channel now. We will probably come back and firmly establish top of the old channel as support before doing one of two things, Either breaking out sometime in the next 24-48 hours or pulling a classic of riding down the top of the old descending channel until it intersects with the 5 year again which could push the break out to be late February before it can stage a breakout.
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So possible break out in the next 24-48 hours, or in then next 10 days, the next 30 days or absolute worst case, March. Look for which one of these scenarios appear to be forming to get a better idea… There are a lot of possibilities here, trying to predict whats next in the short term versus medium term is quite difficult, these seem the most plausible but I will update if it looks like we see something else starting to form.
Every time we touch the 5 year trendline I see it as a huge opportunity to go long leveraged and add to my long holdings. Our mid-December low may be the last time we ever see BTC that low.
We should also be reminded there is a chance we retain this 6 /7 month descending trendline and break the 5 year trend. I would consider an exit to the sidelines in the event we have a confirmed break of the 5 year ascending trendline.
All of these are observations I made in my analysis of BTC trends, they are not investment advice, you should do your own research.
Short term trading pro-tip
Use depth of market! Here is a quick capture of the books action, look at the spike in bids on the 10th followed by this recent run. For shorter term trading, scalping and swing trading, I like to rely more on market depth.
