Bitcoin Analysis: Weekly Bearish TK Cross & Full Trend Overview
Updated
First off let me say I am not a fan of Elliott Waves, now I know some traders rely solely on E.W. but as time goes on and they gain more experience those analysts will eventually come to the same conclusion as I have. Elliott Waves are subjective, I rely on very little wave analysis, I do take it into account, but I never base a trade solely on them.
That being said if Elliott Waves were exact we still have another leg down in our corrective trend, these are roughly placed as Bitcoin's nature does not always fit into E.W. theory. Honestly I am not satisfied with the placement of the end of wave A as its placement changes many factors. Please realize this is not something to rely on as a predictive method. The rules of Elliott's are exact in some sense but at the same time they are not, before all the Elliott Wave maximalists start huffing & puffing, keep in mind Elliott Waves are typically recognized after they have passed. Please see articles like this to understand my experience with them: https://forextradingstrategies4u.com/elliott-wave-criticisms/
That is all on Elliott Waves for now, I may do a tutorial on them once I do some more important educational lessons.
Weekly Overview (above)
As mentioned prior in several of my past ideas, if we close below the 50 period Moving Average then we are due for another leg down. We closed below it yesterday and also saw the Tenkan-Sen cross the Kijun-Sen creating a Bearish T.K. Cross. The last time this happened was in May of 2014. At the time we were at $650 & ended up dipping to $150, the market was a completely different market then and the amount of attention on Bitcoin from the rest of the world cannot even be compared. My point is, it has been awhile. This is useful to know because we are almost repeating that time frame exactly, we crossed during the C drive down, the difference was then we had some major bearish catalysts that affected the entire market and created a sense of panic. There is panic now but that C drive down ultimately went too far down into oversold territory due to different circumstances.
Daily Overview (below)
On the chart below we see a converging T.K. Cross below the Kumo. Again this is a bearish signal, the sell off is not typically instant however there has been time when it has. We also see where I have placed support zones as a guide. As we approach each one of those I will be watching Volume and Momentum indicators to see if we end up shortening the C drive down. Those areas will have clearer signals of a bounce (or not) as we approach them.
Seen below on the second chart is a side by side comparison with the O.B.V. showing unhealthy levels. To be clear, this does NOT need to match the past price posted at that level. On Balance Volume is primarily used to confirm or identify overall price trends or to anticipate price movements after divergences. One thing to note is that some traders saw the O.B.V. trend being broken last month and assumed that was a Bullish signal of a trend reversal, the error made there by them was that pop out was simply the signalling of the B drive if we are following Elliott Waves. The T.D. sequential shows us on a red 7 on the daily (not visible because it is not zoomed in).
12 Hour Overview (below)
The Chaikin Money Flow shows heavy sell pressure, there is nothing more noteworthy on this time frame .
6 Hour Overview (below)
I am keeping eye on the RSI Bullish divergence here, I will update if I see some action on the RSI as this continues to form. Again volume can set this to align if sell pressure continues..
That being said if Elliott Waves were exact we still have another leg down in our corrective trend, these are roughly placed as Bitcoin's nature does not always fit into E.W. theory. Honestly I am not satisfied with the placement of the end of wave A as its placement changes many factors. Please realize this is not something to rely on as a predictive method. The rules of Elliott's are exact in some sense but at the same time they are not, before all the Elliott Wave maximalists start huffing & puffing, keep in mind Elliott Waves are typically recognized after they have passed. Please see articles like this to understand my experience with them: https://forextradingstrategies4u.com/elliott-wave-criticisms/
That is all on Elliott Waves for now, I may do a tutorial on them once I do some more important educational lessons.
Weekly Overview (above)
As mentioned prior in several of my past ideas, if we close below the 50 period Moving Average then we are due for another leg down. We closed below it yesterday and also saw the Tenkan-Sen cross the Kijun-Sen creating a Bearish T.K. Cross. The last time this happened was in May of 2014. At the time we were at $650 & ended up dipping to $150, the market was a completely different market then and the amount of attention on Bitcoin from the rest of the world cannot even be compared. My point is, it has been awhile. This is useful to know because we are almost repeating that time frame exactly, we crossed during the C drive down, the difference was then we had some major bearish catalysts that affected the entire market and created a sense of panic. There is panic now but that C drive down ultimately went too far down into oversold territory due to different circumstances.
Daily Overview (below)
On the chart below we see a converging T.K. Cross below the Kumo. Again this is a bearish signal, the sell off is not typically instant however there has been time when it has. We also see where I have placed support zones as a guide. As we approach each one of those I will be watching Volume and Momentum indicators to see if we end up shortening the C drive down. Those areas will have clearer signals of a bounce (or not) as we approach them.
Seen below on the second chart is a side by side comparison with the O.B.V. showing unhealthy levels. To be clear, this does NOT need to match the past price posted at that level. On Balance Volume is primarily used to confirm or identify overall price trends or to anticipate price movements after divergences. One thing to note is that some traders saw the O.B.V. trend being broken last month and assumed that was a Bullish signal of a trend reversal, the error made there by them was that pop out was simply the signalling of the B drive if we are following Elliott Waves. The T.D. sequential shows us on a red 7 on the daily (not visible because it is not zoomed in).
12 Hour Overview (below)
The Chaikin Money Flow shows heavy sell pressure, there is nothing more noteworthy on this time frame .
6 Hour Overview (below)
I am keeping eye on the RSI Bullish divergence here, I will update if I see some action on the RSI as this continues to form. Again volume can set this to align if sell pressure continues..
Note
The C.M.F. shows sell pressure subsiding further creating an argument for a rally on this time frame.Conclusion
I am closing this overview short, the short term time frames currently don't provide any input as to our trend. We will see a small price rally on smaller time frames but nothing to indicate a trend reversal. This analysis is a broader overview of the market and any short term trades require a different and more detailed analysis. Again, the placement of the corrective waves above do not mean I am calling that bottom on that time scale, as we approach support levels I will do a separate analysis as market conditions change very quickly for Bitcoin. I tend to be thorough with my analysis and part of that is being sure that I do not make any predicative analysis that could potentially change. Conditions will change as we approach those levels and the market reacts in disbelief.
As of this writing the Weekly and Daily show some very Bearish signals, I will be keeping this in mind as I place my trades, remember the trend is your friend. There will be plenty of opportunities for a long position as we ride the fall down but I will update those with a more detailed analysis of a trade.
I have a suspicion this analysis will create a lot of commotion from those that are E.W. maximalists and also those analysts calling Bullish since 20k, for those that like to post their analysis in the comments, keep in mind I generally do not click them to read due to time constraints.
To end on a positive note since I love Bitcoin too, take a look at the chart below, this is your biggest signal of all time, we have come a long way in such a short amount of time. Once this corrective wave is finished Bitcoin will be stronger and lovable again by the rest of the world, which will create the strongest rally we have ever seen, corrections are healthy for the market. We need corrections to strengthen the market, however as a trader it is important to protect those profits from corrections. Regardless of your beliefs on current market manipulation or that big money is entering into the arena, in the end Bitcoin is resilient. HODL on or trade on.
Thank you for reading and please support by clicking like on this analysis. Like, follow, share and interact to help me stay motivated to keep these trending. Thank You!
Note
There are a few small Bullish divergences on smaller time frames, regardless I expect the sell pressure to pick up and I am looking for a short term settlement at $7,094.Note
As described above.
All posts are for educational purposes and are simply my views of markets conditions.
Please do your own research and use my content to educate yourself.
Please do your own research and use my content to educate yourself.
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