Bitcoin Technical Analysis: WAITING FOR A NEW TREND
Bitcoin continues trading within a very tight range. As I said in my prior update, there are no more guppies for market makers to take advantage of. We’ve finally reached a flatline in price. I don’t expect this to last much longer. Price is currently trading within a small wedge, suggesting an upcoming larger move.
Zooming out on the 1 week chart, we can see price has finally reached the larger, ascending support line that was established back in March of 2017.
The 1 week chart also reveals a tightening of the Bollinger bands, as well as the 8, 21 and 55 day EMA all converging.
In today’s video analysis I discuss, where price may go from here, traps to avoid, trading this market and MUCH more. I hope you find it helpful.
Video Analysis:
If you don’t see the above video, navigate to TIMM (https://mentormarket.io/profile/@workin2005) or Steemit in order to watch.
I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Until next time, wishing you safe and profitable trading!
Workin
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by Workin2005
The Moment we've been waiting for. Do you believe a surge in price can happen without a final dip...?
Yes, I think a surge can happen without a dip. That said, I think it'd be much healthier if bitcoin did dip first...at least down to the prior 2018 low (roughly $5,750). Technically that'd give us closure. If it does test the prior low, there's a good chance the support breaks. As you likely know, every time a support is tested, that support gets weaker. If price drops to the prior low and starts consolidating, I think there's a good chance we're going lower. If it drops and immediately bounces strongly, I'll start calling a bottom.
Right now, we need to break out of this range. As I said in the video, a break above $6,800 would likely signal the start of a bull run, a break below $6,040 will likely signal lower lows to follow.
I think a 70% drop off the top is healthy enough for the market to base, chart shows accumulation and the fundamentals are bullish, what's not to like. This "we need a capitulation" narrative is getting a bit old imo
We don't "need" anything except to breakout of this range. Fundamentals have been increasingly bullish all year while price has dropped. Trying to argue a bottom, or a drop to new lows in this market, at this time, is the flip of a coin. Until we get a break above or below this range, I can make a good argument either way.
What people should be looking at is positioning themselves for a move in either direction. What's getting old is people who continue to make declarations on a market that's completely unpredictable at the moment. Sure, you've got a 50/50 shot at being right...and it's easy to blame an unpredictable market when wrong. But if you have any kind of audience, you should be prepping them for a bullish or bearish break IMHO.
I'm not talking to day traders. We're a small minority. Most people aren't making a living day trading. For the average investor, I'd recommend using a portion (maybe 20-30%) of their funds for accumulation. The rest I'd have on the sidelines in fiat until a new trend is established. Once a clear trend is established, then we can get back to making responsible short term predictions. Until then, making any short term prediction, while claiming any degree of certainty is simply asinine without a major disclaimer.
Bulls say $6,000 has held for 10 months and will hold forever. They say we don't need any kind of new catalyst for a sustainable bull run to begin. It will happen because fundamentals keep improving, we've lost 70% and tested $6K so many times.
Bears say we have no more suckers willing to push price up. Without market moving news (like ETF approval or mass adoption by some major company like Amazon), we're dropping to new lows. Only then will buyers be willing to start buying again. They point out the rise from $6,000 to $20,000 happened in 3 months. This was obviously not a slow, healthy rise, but based mostly on FOMO. They would argue the quick drop back to $6,000 was inevitable and more representative of the fair market value of Bitcoin. They would say it's from that price point we should expect a correction...especially given that bitcoin was around $1,200 at the start of 2017.
Obviously both the bullish and bearish arguments are more complicated...but that's the just of it. I can see the logic and flaws in both arguments. The truth is, this is NOT a traditional market. We don't have decades of history to compare it to....and we don't need to in order to profit. All we need is to establish a new trend. Once we do, profiting will be the easy part. Until we do, let's all take a step back and realize we're dealing with real peoples money.
Perfect analysis, great expansion from your original post. As my latest argumentation would place me in the bear league, I think that depends on the timescale. Without any substantial news id actually be rather bearish, yet long term that's a different kind of a story...
Thanks @conceptskip. I agree. For a sustainable bull run, I feel there needs to be some kind of catalyst to bring in new money. That might come in the form of major news, a massive short squeeze or prices dropping low enough to attract new buyers.
Sorry for the late response. I thought I had replied to this a couple days ago, but it clearly didn't go through.
Fair points here @workin2005, just for the record I didn't mean to take a jab at you when I mentioned the "capitulation narrative" getting old.
I strongly disagree with the 50/50 probability to being right or wrong though, the current market is showing all the signs of a bottom:
It's this blend of bullish fundamentals, flat chart and low awareness that makes it (imo) a great time to buy, provided one respects the principles of position sizing and all that.
There are too many fence-sitting market analysts out -there (I am not including you among them) and I think as analysts we need to have a little more skin in the game and take risks with our predictions and not constantly being afraid of being right or wrong, that also comes with having a good strategy, mine is to accumulate cheap and everything looks cheap to me right now.
Cheers!
I agree the long term (6+ months) outlook is EXTREMELY bullish, for many of the reasons you listed and more. That said, short term, I think a strong case can be made either way. I also agree that analysts should be willing to express a bias one way or the other...but only if they can back that bias with evidence AND if that evidence outweighs the counter argument.
I'm a bull at heart. I want to tell people price is about to explode...and it very well could. But I also can't ignore the evidence of a bearish break. If I put my bias aside, I don't believe either argument outweighs the other. With that in mind, I can't in good conscious call a bottom.
Personally, I'll make money no matter what happens. But I know 99% of those who listen aren't making their living trading. If I tell them the bottom is in, they'll take it to heart. I don't want that on my conscious when I feel it's about 50/50.
Let me preface the following comments by saying I'm NOT referring to you.
I started putting out analysis because I was sick of the many so called "analysts" making ridiculous calls. When they were wrong, they'd blame it on all kinds of things. When they're right, they act like they're Nostradamus. I swear most of them live in their mother's basement. So many people were loosing money because they foolishly listened to the advice of morons. Yes it's their fault for not doing their own homework, but it's also partially on the dishonest TA put out by so many.
It'd be EASY, and much more popular, for me to claim the bottom was in and Bitcoin was about to explode. If I'm right, I look like a genius. If I'm wrong, no worries...it's just crypto.
When I started putting out videos, I asked the advice of a few successful analysts. I had a very popular one (who I'm sure you know) advise me to "always sound bullish. These fools eat that stuff up. Doesn't matter if you're right...just keep'em excited."
Yes...He literally said those words. I said a few choice words back. Needless to say we haven't spoken since. Know what? He's still doing the same old song a dance and his followers eat it up. I don't know how he lives with himself. Again...this is NOT directed at you.
So while I agree it's good to have skin in the game, I don't think we should make a call just to say we made a call. If their's strong evidence on both sides, I feel it's up to us to tell our audience just that. Right now, some of the best minds in TA can't agree on which way bitcoin is going to break. Do I lean bullish? Yes. Am I willing to publicly call a bottom with so much uncertainty? No way.
Well that was much longer than I intended! ;-)
Anyway...Hope you don't take any of this personally. I believe you're a good, honest man and respect your work. We all have to do what we think is right. I appreciate your thoughts my friend.
I know this question isn't directed at me, but I'll answer it anyway. BTC bottomed in February, all the way down to a level that has acted as support ever since (roughly $6000). The fact that the bears keep calling for "another dip" or "capitulation" of an asset that shed 70% of it's value is, in my opinion, ludicrous. The support has held well, on many occasions throughout 2018. Sentiment is looking a bit bullish (at last), if somewhat lethargic.
I see absolutely no reason why BTC should dip again, neither from a technical nor from a fundamental perspective. Should BTC dip again, it will probably just be down to the local support level, of which there are two. The first is steadily rising and is sitting at around $6050, while the more long-term one is a little below $6000 (let's say around $5850). But as for a new 2018 All Time Low? Nope, I don't see that and there is no reason for it to happen.
Thanks for your thoughts. You seem to get a bit out of sight, that BTC has been around 1K$ for quite a while in 2017, so even if it dropped to 3K, it would still be considerable gain. Those who think 6K is low, only focus on the bandwagon trip from q4/2018, this is not all of BTC history though... take a look at that and you will see btc has been around 300$ for years!
It is low, in light of the fact that if you follow BTC history back to the beginning, it has a very strong general up-trend. You can't compare BTC to a static value because it should be rising. For BTC to drop to 3k now would be to break through every trendline established to far. If you go through my posts you'll see that I specifically look long-term and track BTC progress over such time scales.
Yes you are right, there is a longer term bullish trend. But has that trendline reached 6K already? I am not so sure about that?
Absolutely agree with you @bitbrain, the fact that most of the dumb traders on Trading View are waiting for "the dump" tells me it'll never happen, chart shows clear accumulation, time to get in.
It certainly looks that way to me! Buy now or cry later!
Yep, that's pretty much exactly what I'm seeing too.