BTC Correction to Complete Near 7.8k$ (Confluence of Indicators)
It seems that everyone is still worried about BTC these days, and reasonably so. However, I believe that a confluence of indicators suggest that we are very close to the end of this long hard bear market. By my count, this correction conforms fairly well to a WXYXZ style correction (though there are valid alternate counts). Currently, I believe that we are completing the last wave downward on our final zigzag leg (labeled X-Z). Remember that zigzags always have a 5-3-5 rule. Each of these is labeled on the chart.
The end of the Bear: A Confluence of Indicators.
Last week, (during wave 3), we experienced a very hard bounce off the long term historical support level of 7.8k$. I think that this range may be tested again on this final leg down. By my count, I would expect that prices may continue to decline to touch these levels before moving back up again. However, I do not think that 7.8k$ will be breached due to this being a historical support level. This notion is supported by the strong surge in volume when the price attempted to breech this support.
MACD Shows Bullish Divergence
Note the MACD shows two crossover points which correspond to the (Y) point as well as the (3) wave of this current (X-Z) on the larger degree of trend. What stands out to me is that these crossover points on the MACD show a higher low. This property, known as bullish divergence, indicates that the sellers are running out of steam and that demand will potentially pick back up.
RSI Shows Support Levels
Now for the RSI. With moving up of wave (4) on our current zigzag B-C leg, we saw a swing into the neutral zone of 30-60. The RSI shows also a series of higher lows suggesting again that the bears are running out of steam. I see two RSI support zones, first at 35, and again at 30. As we make our attempt to push downward to test 7.8k$, I expect that this support will be tested and held (in confluence with the MACD).
The bears are getting tired ...
I also want to make a note of the fact that the ratio BTCUSDLONG/BTCUSDSHORT has snapped back from its low, and the corresponding RSI has moved back into the neutral zone. Currently, for every 1.0 BTC in a short position, there are 2.267BTC in a long position. Compare this to the deepest part of this last leg down, where the the ratio was about 1.0BTCLONG/1.0BTCSHORT. In other words there are much fewer people shorting the market - leading me to believe that BTC will soon begin to rise once again.
To break below the historical 7.8k$ support would require another huge surge in sell volume (panic selling). Additionally, the MACD bullish divergence would have to break along with both RSI support levels. My intuition is that the price may test this level, and bounce back perhaps forming a leading first wave diagonal to initiate a new bull cycle. Of course, anything is possible, but to me this seems like the most likely scenario given the current data. Undeniably, this market has been a difficult learning experience for us all, and I hope that everyone has developed a healthy respect for such powerful market tides.
Take care during the end of this correction!
Confidence 4.0/5.0
@mxcrypt
Standard Legal Note
These are solely my own ideas! This is by no means professional financial advice and I cannot be held accountable for any investment decisions undertaken by reading this article!
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BTC Wallet :3PPENyabp2gsEfNahLyhMsgdwtjbodrtFm
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Though i am not a analytics and not sound knowledge in technical graphs but as i have seen the whole scenerio of cryptocurrency ,this market is only based on news and hypes.it effects deeply rather than any other thing.Its my opinion only and may be i am wrong.thank you for this elaboration.
Although I am not too into fundamental analysis, I think that the market is actually in the process of moving away from hype and pump and dump dynamics. Blockchain is becoming a serious technology, and many of the best computer scientists in the world are working on making it viable.
For example, check out the Cardano (ADA) project if you are not familiar with them already. These guys are doing serious work in cryptography and have published many peer reviewed academic papers demonstrating theoretical and experimental proofs of concept of their work. I really admire IOHK for their rigorous approach, and I hope that projects like ADA coin set the tone for the future of blockchain.
https://www.cardanohub.org/en/academic-papers/
https://iohk.io/research/papers/
I heard a story that a well known analyst went to work for an ex pit trader who was now ceo of a trading firm. The analyst called the bottom of the market using well established TA.
When the price reached the target, the analyst confidently stated that this was the bottom, as per analysis.
That’s bullshit, cried the ex trader, picked up the phone and instructed someone on the floor dump a large amount of stock in the market, the price slid a further 5%.
😁
Thanks for the post! And let’s hope the bulls are feeling feisty!
Of course - Anything can happen so say Murphy's Law and Schrödinger's Cat! However, I hope for everyone still holding on to their position that this TA pans out. To me it looks solid as we have already rejected the rock bottom crash scenario pretty hard. I'm glad you enjoyed the analysis!
I’m a nerd, and am always interested in people’s technical analysis.
Keep up the good work!
Looks like we ended up with an extended fifth wave! Quite interesting that this historical support failed. Prices are now stabilizing around 6.8k$ (which was my most pessimistic scenario and I considered unlikely. This is historical support #2, which I did not mention in this post). In my mind, this almost qualifies as a panic sell - which is quite cool to be a part of actually!! It doesn't occur so often! It seems that BTCUSD long positions have recovered substantially as well with huge volume. I think we finally hit the bottom. There is nothing left to sell!
Hello mxcrypt!
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