Bitcoin Heading Down to 5450-5750 Support Zone!
Updated
If you read my previous analysis then you would have seen that I identified a symmetrical triangle pattern that would potentially send us down. Well as it turns out; we didn’t see the confirmed break to the downside we were looking for and the crisis was averted! Or was it…
We now find ourselves with two potential triangle patterns at play which could take us either way.
The first pattern is the larger orange symmetrical triangle bearish continuation pattern. This pattern really wants to take us down into the green support zone between around 5450 and 5800ish. On the flip side however, a confirmed break to the upside could see us go as high as 7900 based on the height of the triangle. I think this is unlikely however; as symmetrical triangles are usually continuation patterns and seeing as though we are in a downtrend, then it would more than likely want to see us go lower.
The second pattern is the smaller purple bullish ascending triangle. This pattern wants to send us up to around 7580ish. It’s a real battle of the bulls vs bears going on here! But who will win?
Well taking into consideration BTC shorts – some people are saying the cup and handle formation failed; however I disagree. I think the handle is still forming so there is a pretty good chance that we fall down through the orange symmetrical triangle and get shorted all the way to the bottom of the green support zone (fuelled by the BTCUSDSHORTS Cup and Handle Pattern).
Either way, for now we do not trade and we wait for a confirmed breakout either side of either triangle before determining our next move.
We now find ourselves with two potential triangle patterns at play which could take us either way.
The first pattern is the larger orange symmetrical triangle bearish continuation pattern. This pattern really wants to take us down into the green support zone between around 5450 and 5800ish. On the flip side however, a confirmed break to the upside could see us go as high as 7900 based on the height of the triangle. I think this is unlikely however; as symmetrical triangles are usually continuation patterns and seeing as though we are in a downtrend, then it would more than likely want to see us go lower.
The second pattern is the smaller purple bullish ascending triangle. This pattern wants to send us up to around 7580ish. It’s a real battle of the bulls vs bears going on here! But who will win?
Well taking into consideration BTC shorts – some people are saying the cup and handle formation failed; however I disagree. I think the handle is still forming so there is a pretty good chance that we fall down through the orange symmetrical triangle and get shorted all the way to the bottom of the green support zone (fuelled by the BTCUSDSHORTS Cup and Handle Pattern).
Either way, for now we do not trade and we wait for a confirmed breakout either side of either triangle before determining our next move.
Note
The orange symmetrical triangle is currently holding up and providing resistance.Note
The orange symmetrical triangle is still providing resistance, however we are getting ever so closer to the apex. We would want to see either a break to the upside with supporting volume very soon, else it looks like we could be going down as expected. It is worth noting that if we do break to the down side, we still need to see supporting volume as confirmation - in which case I will go short. Without volume then a break either side is not confirmed and we need to reassess the situation.
Note
We have had our confirmed break to the downside with supporting volume. We will now test the April low at around 6420 but will likely fall further down. Our next test after the April low is the the weak support at 6145, though as it's name suggests - this is weak support. If both these levels fail then we are going to the Feb low around 6000 as a minimum! I will keep you updated as we progress on our journey down. I will also keep an eye on BTCSHORTS as they will help us determine our bottom. CheersNote
April bottom has been breached. Next test is the weak resistance at 6145. I shorted on confirmed break out (hour chart) from 6550 to 6350 at 25X leverage ... So close!Note
Boom - We have wicked down several times and my short worked out at 25X. I will keep a close eye on what will happen next - but I don't consider myself a 'gambler' - more an 'educated guesser'; hence I rarely use leverage to either short or go long. In this case I was prepared to short using Bitmex and keep a close eye on my position at 25X. It's more work than I would like, however a bear market calls for that. We all perfer a bull market of course, and I think we are getting close.Note
PS - Yes I think we will go lower. I have stated where I think the absolute bottom likely lies. I always trade sensibly and well within forecasted extremes (even upon confirmed breakout) - I would rather hit a trade at an acceptable profit rather than try and milk it for every thing it is potentially worth and potentially lose it all!Note
We are getting very close to the rim of the cup and handle pattern on BTCUSDSHORTS. At the same time we are very close to the 6K psychological support area corresponding with the Feb low (having actually pierced through it on the current candle). This tells me we are at a crucial decision point...If we are rejected at the rim on the shorts chart then we are bouncing upwards from the support provided by the Feb low. Anyone who has recently shorted will get rekt! This will happen very quickly!
However, if the shorts cup and handle actually plays out then we are going all the way down to 5450 before a bounce. This will also happen very quickly! The next 2 or 3 candles will tell us more, so I will update then.
Regardless, this is a no trade zone for me. I am simply watching the market for the moment (and as mentioned in my previous comments I already completed my short trade so I am happy). Even if the cup and handle plays out, I will not short again due to the fact that it will happen very quickly. Shorts will go parabolic and then get rekt via the inevitable short squeeze. I will keep updating this chart until we find our bottom, then I will create a new chart outlining the new patterns I see. Cheers
Related publications
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.