Long

Updated

A pretty close call. With a subtle overall Long bias.

Scenario: price is correcting by well over 2 months, down > 50% and close already to target area proposed in previous Weekly analysis.

Price currently sits at the bottom of a broad ascending channel, whose top links 2021 highs and bottom links 2022 lows as well as 2019 high.
That's pretty straightforward, as you see above.

We have some bullish hints:

A falling wedge candidate
A red TD count > 9 on weekly already
A bullish divergence on RSI (as long as price stays afloat of 28,6k).

Hence i'd say that a breakout on volume of resistance (currently at 40.500$) would likely signal a Long opportunity, with a TP#1 above the 45.000$ mark.
That's theory though and i'd agree that from here -we're still in no mans land well under 38.000$ as i write- that's quite far fetched.

Price action is still fragile and vulnerable to external factors (FUD, bad news, markets weaknesses).
Volume is lower than what used to be back in may-july at similar price levels.

Hence let's face the bears case as well:

For now we cannot rule out neither a further rejection at resistance, nor a re-test of recent lows close to 33k mark.
The latter possibly ending either with a generic double bottom or a full fledged capitulation.

A capitulation would possibly be a nightmare.
Theroretically pushing price down to 20k area, around MA200/W "floor" level.

We cannot exclude such a risk (NVT would account for that), but we may try to evaluate its odds.
I think such evaluation implies bringing 31.725$ level into focus.

That's FIB 1.618 of the whole leg up which started at 152$ and ended with 2017 ATH at 19600$.
Moreover that's in the area which stopped the correction down back in the summer, then corroborated by MA50/W.
Now it's backed by MA100/W (currently rising from 31.665$), adding some further degree of elastic support.

If things go south i'd expect such support level to weaken/absorb part the impulse down, if not stop it.
Some sensible intraweek spiking down may be inevitable, but for now i would consider a double bottom or a fakeout (bear trap) more viable options than a full fledged capitulation here.

Hence, whatever the short term action (which is beyond the scope of current analysis), i tend to see an overall subtle bullish bias gathering into current scenario.

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NVT, which i mentioned above and analyzed in other post:

It's unsure whether it is going to fully close that gap within the ongoing impulse.
Such case it would mean a capitulation and looking at it would come in handy.

Son to say.

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And this is Willy, still pretty oversold:

We need it to get back over -80 in order to better evaluate a rebound scenario.
Watch it.

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Let's see whether price manages to keep afloat of 35,8-36k.
If it fails to we may have a re.test of lows, as per OP.

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Good. Resistance ahead.

Now let's confirm that RSI breakout, and see.

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Zoom of upcoming test.
Volatility expected, price is going to take a route.

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Breakout.

Yet it's pretty stretched on daily, TD count 8 already as you may notice.
Bulls should move soon or another slump will be inevitable.

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Very risky.

Time is ticking.

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Some pretty interesting weekly RSI / Stock patterns awaiting confirmation (on sunday):

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Edit: fixed line.

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So that's the plan, if we're lucky, enough:

Would like to see a further leg down, but wouldn't regret a straight up either.
What's important is to avoid any daily close below 31,7k.

Reasons in the OP.

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For such scenario to materialize we need the breakout of that falling wedge.
Such a breakout on volume would pave the way to 45-47k, eventually.

So let's watch it along next days/weeks.

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Here we go, next test of resistance inbound.

Watch it.

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At last:

Nice.
Anyway, now a daily close well above 39500$ is needed ASAP in order to avoid a throwback (Stoch RSI on daily is quite high).

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42ish ... good. Up about 27% from 33k.

Overall, on the macro scenario, we have a (red) TD count > 9 on weekly.
Meaning about 12 consecutive "red" candles without reversal:

That's something which contributed to push my bias on the bullish side, when i published this analysis.
It was forecasting an upcoming impulse up due to mere bearish momentum exhaustion.
Timing was the missing variable before Parabolic SAR reversal and RSI breakout on D.

Mind the fact there's just ONE precedent: the single longest TD impulse down dating back to 2014.

It was 14 candles long and led to some strong "interim" bounce.
It bottomed out on 11th candle (same candle of the recent 33k low).

It reversed after FAILING to pierce up weekly parabolic SAR.
THis is something worth NOTING.

Here it is:

Just for the record.

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Red TD count ended at 11 candles.

Now watch at middle of BB and Parabolica SAR on weekly.

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TP #1 was exceeded today, about 45.500$.
Up 7000$ within less than 2 weeks.

As usual it's up to you managing your gain.

Too soon for talking about TP #2.
Let's allow the dust settle a bit.

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The scenario:

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Cooldown ongoing.
Weekly candle not looking good so far.

Let's see close.

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Some interesting intraday action:

Ongoing test of 41-39,5k support area.
Slight divergence.

Let's see the outcome.

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Here is the macro picture:

Lots of uncertainty (see the long wicks of the last 2 candles). Anyway, despite the rebound and till price matches and reverses Parabolic SAR overall bias stays bearish. Mind that, act accordingly and protect your positions.

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Supports and resistance (Par SAR):

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Intraday notice: possible diamond forming:

You know the drill ...

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Parabolic SAR W reversed at last.

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Fragile scenario.
By the way most problems sit above:

Pretty tall resistence area, high risk of crossover of MA20/W and MA50/W.

Would like to see (at least) a partial pullback to resistance (45/46k), in order to gain some time and avoid a bad monthly close and/or a short term slump.

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So we should look at W timeframe and hope in a Willy and MACD crossover.

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Willy and MACD crossover on Weekly.

That''s good, but we have a long TD count on D, hinting a pullback is not far in terms of time.

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48k taken.
Now watch out, we have a rising wedge.

Unless it manages to break out we may have a swift correction within next few days.
Watch it.

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Another view.

Tricky.

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Correction confirmed.

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Yes, rising wedge confirmed.
Correction unfolded.

Yes, still boring.
Scenario nchanged, awaiting some interesting action.

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Looking forward to see whether hash ribbons is peaking or not.

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Next chapter here:

[Watch it] A word of caution: couple tricky months ahead.

f-73

Related publications

That's a highly risky scenario.

by f-73

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