BTCUSD | Watch For Big Market Breakdown
Updated
Bitcoin is hanging at the top edge of the no trade zone established over the last 6 months, this is a classic area for price to turn around so watch for a big market breakdown around this $5,235 price level. If you have been following my trades you will see that I have flagged it as a good shorting level.
As well, we can see there is a formation (red line) spanning the entire length of the bear market that used to be strong support but is now resistance; bitcoin is unlikely to break it on it first try around. The confluence with the top edge of the no trade zone reinforces the idea that this a convenient area to short the market.
Turning to the Gann lines, we can see that bitcoin cleared the 3/1 Gann, but it remains untested. It is unlikely that the 4/1 Gann will be breached as a result. Testing the 3/1 Gann line means descending below $3,843, but this is a bearish confirmation level which will induce plenty of selling.
The declining trade volume on the CM indicator supports the bearish picture, so I expect bitcoin to retrace sharply with increasing volume to around the $2,000 level which would complete a symmetrical corrective structure ("measured move") that is common in crypto.
How to gauge the measured move?
A corrective structure can be measured on the weekly log chart, where we can see that the all time high of approx. $20,000 to $6,000 was a -67.74% move. Now if we extend that percentage from the break of support at $6,000 we get a measured move target of $1,991. Since there is a downward slope to the support/resistance level we can also estimate a measure move for a "wick target" of $1,740. So be sure to pepper some buy orders around that wick target ;)
PS. Bitcoin dominance looks to be very bullish, so expect altcoins (ethereum, litecoin, etc.) to drop even harder than bitcoin.
As well, we can see there is a formation (red line) spanning the entire length of the bear market that used to be strong support but is now resistance; bitcoin is unlikely to break it on it first try around. The confluence with the top edge of the no trade zone reinforces the idea that this a convenient area to short the market.
Turning to the Gann lines, we can see that bitcoin cleared the 3/1 Gann, but it remains untested. It is unlikely that the 4/1 Gann will be breached as a result. Testing the 3/1 Gann line means descending below $3,843, but this is a bearish confirmation level which will induce plenty of selling.
The declining trade volume on the CM indicator supports the bearish picture, so I expect bitcoin to retrace sharply with increasing volume to around the $2,000 level which would complete a symmetrical corrective structure ("measured move") that is common in crypto.
How to gauge the measured move?
A corrective structure can be measured on the weekly log chart, where we can see that the all time high of approx. $20,000 to $6,000 was a -67.74% move. Now if we extend that percentage from the break of support at $6,000 we get a measured move target of $1,991. Since there is a downward slope to the support/resistance level we can also estimate a measure move for a "wick target" of $1,740. So be sure to pepper some buy orders around that wick target ;)
PS. Bitcoin dominance looks to be very bullish, so expect altcoins (ethereum, litecoin, etc.) to drop even harder than bitcoin.
Note
For play-by-play please follow this idea:
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BTC vs. SilverPS. I caught the short trade on Silver here:
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Note
The trade associated with this idea has been revised and can be found here:![BTCUSD [REVISED] | 60% Daily Short Trade Setup](https://s3.tradingview.com/h/h6OsR1Ey_mid.png)
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