Hey guys just wanted to give a quick update on Bitcoin. On my last idea I was looking for a short around the 6.8/6.9k region if the opportunity presented itself. We never got the reversal signal and instead the bulls were strong enough to break this heavy resistance zone.
This bullish impulse has stalled as price found resistance the 0.5 fib level, the blue resistance trend line, the top of the ascending channel (black), and the 89EMA (on the daily). Before the drop there was a slight bearish divergence on the RSI, CCI, and CMF on the hourly, so I opened up a small short position just around 7,100. I also noticed a lot of the smaller alts on Binance started to drop before Bitcoin fell so that gave me an early signal as well. On top of that there was a 4hr bearish RSI divergence on BTCUSDLONGS, signaling a drop in longs and subsequent drop in price.
Now the bulls might try to attempt to get past these resistances again, but I believe the most likely scenario is for the bears to drop this back down towards the 6.7/6.8k region where there is heavy support. This lines up with the 0.382 fib level the 200MA (orange), 89 EMA (magenta) on the 4hr, and of course a very strong support range that was previously heavy resistance.
We could also see the price extend sideways for a few days to find extra support at the bottom of this ascending channel. Then from there the bulls should be able to push the price back up and find resistance at the top of the larger descending wedge (on the daily view), where the 0.618 also intersects.
But before I plan on opening a long position I will wait for confirmation of underlying strength once price reaches the support area. I will update if anything changes.
Please click like if you find this analysis useful! Thanks :)
This bullish impulse has stalled as price found resistance the 0.5 fib level, the blue resistance trend line, the top of the ascending channel (black), and the 89EMA (on the daily). Before the drop there was a slight bearish divergence on the RSI, CCI, and CMF on the hourly, so I opened up a small short position just around 7,100. I also noticed a lot of the smaller alts on Binance started to drop before Bitcoin fell so that gave me an early signal as well. On top of that there was a 4hr bearish RSI divergence on BTCUSDLONGS, signaling a drop in longs and subsequent drop in price.
Now the bulls might try to attempt to get past these resistances again, but I believe the most likely scenario is for the bears to drop this back down towards the 6.7/6.8k region where there is heavy support. This lines up with the 0.382 fib level the 200MA (orange), 89 EMA (magenta) on the 4hr, and of course a very strong support range that was previously heavy resistance.
We could also see the price extend sideways for a few days to find extra support at the bottom of this ascending channel. Then from there the bulls should be able to push the price back up and find resistance at the top of the larger descending wedge (on the daily view), where the 0.618 also intersects.
But before I plan on opening a long position I will wait for confirmation of underlying strength once price reaches the support area. I will update if anything changes.
Please click like if you find this analysis useful! Thanks :)
Note
Got a perfect bounce from the support zone right around the .382 fib level. Hope you guys bought there!Note
Price is now at previous resistance. Notice divergences on the 4hr time frame on RSI, CMF, and CCI. Considering closing out this long now, keep your eye on those divergences and don't get trapped!Note
Okay guys, the price has touched the top of this big channel we have been in since the beginning of this rally. If you turn on standard pivot points you can we price touched the R2 level on the hourly. Looking at the 4 hour we can see bearish divergences on RSI, CMF, CCI. Not sure if we will see a big drop just yet, but I just exited my long position a little while ago to reduce risk. Most likely price will go back down towards the blue trend line that it broke earlier today to re-test as support.Note
Gotta love crypto with that spike up and back down to where we were before ;) Now it just looks like one fat red candle and red volume on the 4 hour. Still seeing divergences on the 4 hour as well. Many of the alts are now in the red on Binance so it's looking like a drop should be coming soon. That spike actually stopped right below the start of the red region I have up top, but we could still see price make another effort back up to that area before the drop. But don't ignore these divergences and bearishness emerging nowNote
That 4 hour divergence is still in play on multiple indicators. Price is still finding resistance at the top of this ascending channel. A drop here would make the most sense and I am targeting the 6,900 to 7,100 region for price to fall towards before moving back up. With shorts rapidly increasing, a drop here would only lead to more more shorts stacking up and a short squeeze at that point would be even more profitable for exchanges than doing it right now. I will update as we get closer to that price range!Note
And there is the drop I was calling for! (finally). It’s funny because I always seem to call these moves way too early, but they always follow through! You see on the chart that rising wedge finally broke down, and there were several bearish divergences as I pointed out many times throughout my last updates. Now the price has settled on the 4-hour 89EMA (magenta) as well as touching the support line of this broader ascending channel that the price has been contained in since the beginning of this bull rally.It’s hard to tell if these supports will hold considering how much selling volume just came in with this drop. But if the bulls can start buying this dip now, there’s a good chance we will see the price slowly inch its way back up towards the target resistance above which is around 7,500-7,700 region. However the more likely scenario right now is that this bull rally is already over and while everyone has been waiting for the 7.5-7.6k region to hit, the bears are taking over again.
If you look above you see I have two black trend lines coming down. The one that we just hit was the original trend line drawn from 13k to 11.7k to 10k that we had drawn before the last bull rally (to 8.5k) had that fake breakout above this resistance trend line. I thought it would be smart to keep this trend line and turns out the price found resistance there again over the last couple days.
For now we wait to see how the price reacts at this current support.
Note
Price broke the 89 EMA like it was nothing. Now it looks like it's finding some support around the 0.236 fib level. I double that this holds either and we will see more downside. The severity of this drop is something we have not seen since the drop from 11.7k (second peak). Looks like that 200MA and 400MA bearish crossover I mentioned in my last idea is finally having its effect. This drop was triggered by yet another SEC denial of ETF proposals, but TA also supported a big drop was coming with the 0.618 resistance, descending trend line, and massive bearish divergences on multiple indicators.If this support at the 0.236 fib doesn't hold, I think its very likely we will see the price break below 6k and see 5k or even 4k prices in the upcoming weeks.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.