BitcoinUpdated All That Volatility & BTC Technicals Still Mostly Weak!
Hi friends! Welcome to this update analysis on Bitcoin! As you all know, there has been an enormous amount of volatility in the past 24 hours, but has it made a big technical difference? In the recent past, I have published articles about how BTC could be in a large bull flag. At the time of that posting (linked below) the flag body was more of a pennant shape. BTC broke down below the 200 MA (in purple,) and that may have simply changed the shape of the flag body to a more traditional channel. Now, before I go any further, it's important for EVERYONE to understand, that by definition, this IS a bull flag. There is a clear rising flag pole, and a clear consolidation flag body. With that said, it's also important for everyone to understand that not all flags break out in the intended direction. in fact, around 30% of flags don't produce breakouts in the textbook direction. That doesn't mean that they weren't flags. It simply means that those examples fell into the 30% category of flags that failed to break out in the textbook direction.
Now, this structure on BTC's weekly chart is a bull flag by definition. That's a fact. The question is, will it break out to the upside, or will it fall into the 30% category of failed breakouts? The answer, is that it isn't for us to decide, and it isn't for us to ASSUME. We have to let the market SHOW us with confirmation, what it's going to do. Currently, there is no indication that BTC is breaking out above this bull flag. BTC was up around 40% at one point yesterday, but a lot of that has been given back, and BTC is still inside of the flag body. So, on this large scale view, BTC tried to break out above the bull flag, but rolled back over and failed to maintain the breakout. With that said, we have to keep in mind that this is a weekly chart, and the week isn't over yet. There is still a chance that BTC could close this weekly candle above the bull flag, but that hasn't happened yet.
So, despite yesterday's roughly 40% rally, it was simply a massive failed breakout attempt, which is actually pretty negative. That could change in the future, but as of now, it was a failed breakout. Things aren't all bad though. We can see that BTC is barely holding above the 50 and the 200 day moving averages.
Another thing worth pointing out, is that BTC has only posted a lower high so far. So, despite yesterday's volatility, it's still in a technical downtrend, of lower highs and lower lows. We still have not seen a higher high on BTC, since the peak of 13,800.
The other interesting dynamic of the chart, is that yesterday's big rally also occurred exactly on the 61.8% retrace. So, it's highly possible that the bullish move was a technical reaction to the 618, more than anything. That could have been the cause even more so than the words of China's President Xi. So, the positive reaction to the 618 is nice to see, but we still have a lot of proving to do on the upside.
Then we have the death cross, which is happening right now. That's indicating that there's a major bearish change in the market. BTC has failed to hold the 21 week moving average. It failed at the 50 MA on multiple occasions, it remains in a downtrend, the money flow is weak, volume is weak, and do you see that little blue moving average on the chart? That's the 21 week MA. It's proven to be a critical moving average for BTC in bull markets, and four weeks go, we plummeted below it. Yesterday, we just defined it as overhead resistance.
Overall, BTC is mostly bearish (short term,) but it's sending a few mixed signals. Inevitably, traders must watch for a bull flag breakout, or a failure at the moving averages. Also, if BTC closes below the 618, which is at about 7200 right now, there could be a significant amount of downside remaining. Personally, I will be using the 618, the aforementioned moving averages, and the bull flag formation as tools to determining the forward direction from here.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Now, this structure on BTC's weekly chart is a bull flag by definition. That's a fact. The question is, will it break out to the upside, or will it fall into the 30% category of failed breakouts? The answer, is that it isn't for us to decide, and it isn't for us to ASSUME. We have to let the market SHOW us with confirmation, what it's going to do. Currently, there is no indication that BTC is breaking out above this bull flag. BTC was up around 40% at one point yesterday, but a lot of that has been given back, and BTC is still inside of the flag body. So, on this large scale view, BTC tried to break out above the bull flag, but rolled back over and failed to maintain the breakout. With that said, we have to keep in mind that this is a weekly chart, and the week isn't over yet. There is still a chance that BTC could close this weekly candle above the bull flag, but that hasn't happened yet.
So, despite yesterday's roughly 40% rally, it was simply a massive failed breakout attempt, which is actually pretty negative. That could change in the future, but as of now, it was a failed breakout. Things aren't all bad though. We can see that BTC is barely holding above the 50 and the 200 day moving averages.
Another thing worth pointing out, is that BTC has only posted a lower high so far. So, despite yesterday's volatility, it's still in a technical downtrend, of lower highs and lower lows. We still have not seen a higher high on BTC, since the peak of 13,800.
The other interesting dynamic of the chart, is that yesterday's big rally also occurred exactly on the 61.8% retrace. So, it's highly possible that the bullish move was a technical reaction to the 618, more than anything. That could have been the cause even more so than the words of China's President Xi. So, the positive reaction to the 618 is nice to see, but we still have a lot of proving to do on the upside.
Then we have the death cross, which is happening right now. That's indicating that there's a major bearish change in the market. BTC has failed to hold the 21 week moving average. It failed at the 50 MA on multiple occasions, it remains in a downtrend, the money flow is weak, volume is weak, and do you see that little blue moving average on the chart? That's the 21 week MA. It's proven to be a critical moving average for BTC in bull markets, and four weeks go, we plummeted below it. Yesterday, we just defined it as overhead resistance.
Overall, BTC is mostly bearish (short term,) but it's sending a few mixed signals. Inevitably, traders must watch for a bull flag breakout, or a failure at the moving averages. Also, if BTC closes below the 618, which is at about 7200 right now, there could be a significant amount of downside remaining. Personally, I will be using the 618, the aforementioned moving averages, and the bull flag formation as tools to determining the forward direction from here.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Note
For anyone who's wondering, the 7 week MA is roughly equivalent to the 50 day, and the 28 week MA, is roughly equivalent to the 200 day.Note
The current bull flag, could be a morphed version of this previous pennant...
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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.
Disclaimer
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.