Bitcoin - Oil and viruses don't mix
Updated
Last week we were taken out of the trade by our stop losses, on my last post we talked about that if BTC dipped down to $8500 it needed to dip down quickly and move back up quicker otherwise momentum would be lost, we even had an $8200 buy order. What went wrong? We did have a dip down but it was very slow and the recovery was very slow as well and unconvincing. Combine these factors and you get a big red flag. Another warning signal was when price failed to go over the 50MA on the daily chart after trying for a couple of days. You have to take warnings like this seriously and accept when your trade has gone sideways. The very first warning signal was given by the 20MA on the daily chart last month on the 26th. What I want you all to understand is that price is not just going to melt down out thin air on you, warnings and red flags begin to pile up giving you enough time to make choices. Even if price is going up you'll know when things are about to go south. Last week Friday, the signals went out that this trade had come to an end, just a day later price started to drop.
On the weekly chart, you can see we have melted below the trendline if we close or stay below this line we will see a further drop.
WHATS NEXT?
As mentioned before now we begin to map out where to jump in again. As I did previously, the point is to catch it on key entry places on its way down until you nail the lowest safest entry point. This means you have to be patient and disciplined. Right now there are 3 places that we will talk about later. There is also one scenario that will create a perfect set up for alts which I've been looking forward to for a couple of years. If price continues to melt it will create the perfect conditions for this scenario to play out.
WHAT'S CAUSING THIS PRICE DROP
Market instability caused by two major events (Oil prices and the virus), BTC and consequently crypto, in general, were part of the Sunday sell-off. Oil dropped by an amazing amount (30%.) We also have a long week ahead in which we have to keep an eye on the Dow and Nasdaq to see if institutional money moves to safety some more. I would bet this is going to be a volatile week. The United States is completely unprepared and has no plan for the Coronavirus, this will create more market instability leading to bigger sell-offs. If the WHO declares COVID-19 a pandemic it will create more instability.
VERY IMPORTANT: Hitting the "Like" button is like a tip, please don't forget to do so after reading, this is your way of thanking me for my time and so I thank you for yours.
On the weekly chart, you can see we have melted below the trendline if we close or stay below this line we will see a further drop.
WHATS NEXT?
As mentioned before now we begin to map out where to jump in again. As I did previously, the point is to catch it on key entry places on its way down until you nail the lowest safest entry point. This means you have to be patient and disciplined. Right now there are 3 places that we will talk about later. There is also one scenario that will create a perfect set up for alts which I've been looking forward to for a couple of years. If price continues to melt it will create the perfect conditions for this scenario to play out.
WHAT'S CAUSING THIS PRICE DROP
Market instability caused by two major events (Oil prices and the virus), BTC and consequently crypto, in general, were part of the Sunday sell-off. Oil dropped by an amazing amount (30%.) We also have a long week ahead in which we have to keep an eye on the Dow and Nasdaq to see if institutional money moves to safety some more. I would bet this is going to be a volatile week. The United States is completely unprepared and has no plan for the Coronavirus, this will create more market instability leading to bigger sell-offs. If the WHO declares COVID-19 a pandemic it will create more instability.
VERY IMPORTANT: Hitting the "Like" button is like a tip, please don't forget to do so after reading, this is your way of thanking me for my time and so I thank you for yours.
Note
To keep moving up BTC needs to make it over the resistance line (the green line) and close there this week. If we close below the green line the odds of going down to the blue 100MA line are greater. Note
On the daily timeframe BTC's sole mission is to climb above the 200MA and start closing above it. If it fails to get over the 200MA or if it is rejected by it, you will see a further drop. Note
If you are still in this trade set up a stop loss around $7720.00 if price moves up trail it closely. The odds of another down move are good. During this time of instability it is best to be out. If we move up we can buy once we clear resistance if we move down we can buy at safe entry points below.Note
Hopefully the Dow will bounce up a bit to around $24,200 and get some stability going. BTC will then move up allowing you to move up your stop losses if you are not out yet.Note
Said and done, the Dow went from 23,800 (at closing yesterday) to 24,200 which pushed BTC to 8170, this is what I talked about last night. Don't expect too many second chances to get out. BTC is now well below the 200MA on the daily chart and about to close a third candle there. Currently we are sitting on support - which is generating no demand for BTC - the longer we stay under the 200MA the greater the odds of another move down, specially if there is no demand at the support line.
Note
The more time we spend hanging around resistance and support lines BTC will get weaker. The current candle has to close above the green line to avoid falling. Note
The Dow is dropping and taking Crypto down with it. Next possible stop for BTC is $7200.00. This drop is creating great opportunities to get in for cheap later on. If you want to know more, please PM me. 
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