Bitcoin - Beware The Red Line Of Disaster - But Hope Is Not LostSummary:
Bitcoin has bounced along in this area for some time now, which tells me there is some strength underlying these prices and would seem to indicate that Bitcoin is attempting to form a bottom. We are by no means out of the woods yet. And I would not advise any trades at this moment. The fact is we could still go lower but I think the bias is to the upside.
The Chart:
My readers will recognize the dotted light blue lines on the chart that are a historical angle formed by past price action in Bitcoin. The triangle is quickly coming to a point, and Bitcoin has descended to the bottom of that dotted light blue line which is the lower side of the triangle. This line was tested back around March 18 (see the circled highlights on the chart) and then once again in the current dip between the 26th and of 28 March. It's easy to see that this line has held so far. Additionally the Fibonacci pivot point labeled as S2 on the right-hand side of the chart is also proving to be a rather substantial support for the price until now.
While some people might be tempted to go all in at this point after this demonstrated resistance, I would caution anyone thinking about doing so in that it would be quite risky to jump all in at this point. Hopefully you're sitting on some cash from past trades that you can invest when we get a more bullish signal.
Personally at this point, I would not consider committing any new funds until we attain two goals. First, close a candle above R1 the Fibonacci resistance point that occurs at about 9250 on the right side of the chart, and not commit until we cross at least the descending upper boundary of the price triangle. At this point do not want to try to set trading targets that far into the future but I believe that there would be a fair chance to return to the level of 11,600 if we can achieve those two goals.
Should we head south and break the bottom of the triangle formation, the next support line I see on my chart is at 7425 but notice the red dashed line of disaster that intersects this support line. The red dashed line is the bottom of a trading channel that goes back to Dec. 20th of 2017 and has held in many challenges. In the times that it has failed to hold the price drops have been major. Should the red line fail again we will be near the bottom of the previous downtrend at 5964. Given the history of this trend line a breach near the 6000 level will bring another steep decline.
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All statements and expressions I offer are my opinions, and not meant as investment advice or solicitation. Information provided is not personal investment advice. Seek guidance from a professional investment advisor before trading or investing. Trading cryptocurrencies can be a potentially profitable opportunity for investors. You should carefully consider your investment objectives, level of experience, and risk appetite. Most importantly, do not invest money you cannot afford to lose. I am not a registered investment advisor.
Wishing you success,
Isaac
