Bitcoin is very close to breaking out of the recent downtrend. Volume is still pretty low, but that only shows indecision by the market. Demand has been sufficient enough to keep it from even testing the $6800-7200 major support area. Time is running out for the bears to take prices down there, in my opinion. We could fall towards $7300 on another dump, but I'm posting this as a long setup because I think it could catch many by surprise, particularly those in short positions. Many are still expecting a further drop as well, but the price action by Litecoin is very bullish. LTC has been a leader of the market since February. The Litecoin reversal is what allowed me to speculate that the crypto market bottom had already been reached. Additionally, it has surpassed even my medium-term long trade final target of $130, which means the market may be even more bullish than I expected.
If we break this recent downtrend (orange) with some volume, I think prices could shoot up fairly quickly to test the $9K resistance again. Interestingly, that coincides with the previous parabolic uptrend that was broken (dark blue). If that happens, we will have to reassess the market based on how things unfold. This is only a short term idea. Further downside is possible, obviously. If bears can gain some confidence and break the $7200-7300 support, things could get ugly quick. For potential downwards movement, it's important to keep an eye out for the orange support (since March) and the light blue support (long term bullish trendline). And of course sell volume, but that keeps decreasing as well.
This is not financial advice. Just something I'm seeing, and I'm curious about whether or not it'll play out.
Finally got a Twitter. Follow if you like what I do! @thevictorcobra
-Victor Cobra
If we break this recent downtrend (orange) with some volume, I think prices could shoot up fairly quickly to test the $9K resistance again. Interestingly, that coincides with the previous parabolic uptrend that was broken (dark blue). If that happens, we will have to reassess the market based on how things unfold. This is only a short term idea. Further downside is possible, obviously. If bears can gain some confidence and break the $7200-7300 support, things could get ugly quick. For potential downwards movement, it's important to keep an eye out for the orange support (since March) and the light blue support (long term bullish trendline). And of course sell volume, but that keeps decreasing as well.
This is not financial advice. Just something I'm seeing, and I'm curious about whether or not it'll play out.
Finally got a Twitter. Follow if you like what I do! @thevictorcobra
-Victor Cobra
Note
Quick update - we're back at $8200, but with considerably lower volume. This may be a sign that bulls lack strength to actually push us up any further from here. Volume is decreasing on this current move up, but we should't see any real volume come in until a potential short squeeze (which doesn't have to happen). We'll see how this unfolds.Note
Moving up on decreasing volume is usually not a good sign, particularly at a major resistance level. If it breaks, volume will come in. It also could mean no one wants to sell at these levels either. The movement will be dictated by the next high volume swing.Note
This would mean we could see a quick test of the top of the wedge ($8300 area) before a rejection. This would also align with the first major target of this setup.Note
Looks like this idea is still in play, since the first target of $8300-8400 has been reached. Congrats if you held a long through the uncertainty with the wedge over the last day or so. It's looking like the wedge actually wants to break to the upside. If it does, $9K+ is possible fairly quickly, I think, since a lot of people are trying to short this, assuming a head and shoulders top that hasn't played out yet. Note
Obviously, reaching the next target only becomes more likely if the wedge does break to the upside, but it hasn't yet.Note
After breaking the wedge to the upside (second long setup within the larger setup), Bitcoin has surpassed my second target around $9K, but in reality, the target is the previously broken uptrend (dark blue), which is just overhead. Should we blast through there, we're looking at potentially getting up well above $11K in short order. We'll see what happens! Note
This was a short term trading idea, and the target was reached, so will have to reassess for another possible setup (for example, if we happen to continue higher from here, fueled by a short squeeze), or if we get rejected, continue to consolidate, and alts run.Related publications
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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.