BTC/USDT 3 Options (Yes they call me the man with many options!)
Ok first of all, they don't actually call me the man with many options... not yet anyway! Regardless I like to try and identify a number of possible ways that things can go and lay it out on the table to help me make my decision. I usually favour one option more than the others, but I am still laying out other possible scenarios so if at least one plays out I can say I am right... Haha Ok, that is not actually the reason why. I am also still learning so make detailed notes as to how my trades play out so I can better my analysis.
Note: In this volatile world of crypto with BIG percentage increases a linear scale chart will probably not show a lot of patterns compared to the log scale, especially in long-term charts. This is why I am choosing to use log scale, though I acknowledge that linear data is also good to draw lines/ see trends etc. From my experience, most traders use linear charts when posting on twitter and doing their analysis; however this is mostly on short-term charts. This is because the difference between log and linear charts in short time frames is not that as extravagant as compared to the long-term. At the end of the day, I draw most of my analysis in the log-scale chart because I care more about the percent change of a specific token or currency over the absolute change of it. But I still first look at the linear chart to simply see if I may have missed any pattern and to predict what most of the market is looking at (it is important to look at both as there are a few patterns and trends that can be seen in the linear scale chart that may not be as clear in the log-chart).
Option 1 (Green Arrows) we bounce off the 7890 support and with momentum building, hopefully to the upside of the down trend channel. From here we would test the 9009 level and possibly retrace back to test and confirm the down trend channel as support. If it holds we should hopefully see a strong bounce to test 9774 as new support/resistance.
Option 2 (Dark Blue Arrows) - Fall through the 7859 support to retest the 6600 support level. Support is unlikely to break here so we would see a bounce upwards to then test the black dotted down trend channel. Two outcomes are then possible: A (light blue arrows) sees us break out upwards to test 9009; or B (red arrows) which will see us drop further and retest the $6600 support level again. If B occurs depending on other indicators we would need to reassess the likelihood of retracing further below 6600 or if a strong bounce will occur.
Note: In this volatile world of crypto with BIG percentage increases a linear scale chart will probably not show a lot of patterns compared to the log scale, especially in long-term charts. This is why I am choosing to use log scale, though I acknowledge that linear data is also good to draw lines/ see trends etc. From my experience, most traders use linear charts when posting on twitter and doing their analysis; however this is mostly on short-term charts. This is because the difference between log and linear charts in short time frames is not that as extravagant as compared to the long-term. At the end of the day, I draw most of my analysis in the log-scale chart because I care more about the percent change of a specific token or currency over the absolute change of it. But I still first look at the linear chart to simply see if I may have missed any pattern and to predict what most of the market is looking at (it is important to look at both as there are a few patterns and trends that can be seen in the linear scale chart that may not be as clear in the log-chart).
Option 1 (Green Arrows) we bounce off the 7890 support and with momentum building, hopefully to the upside of the down trend channel. From here we would test the 9009 level and possibly retrace back to test and confirm the down trend channel as support. If it holds we should hopefully see a strong bounce to test 9774 as new support/resistance.
Option 2 (Dark Blue Arrows) - Fall through the 7859 support to retest the 6600 support level. Support is unlikely to break here so we would see a bounce upwards to then test the black dotted down trend channel. Two outcomes are then possible: A (light blue arrows) sees us break out upwards to test 9009; or B (red arrows) which will see us drop further and retest the $6600 support level again. If B occurs depending on other indicators we would need to reassess the likelihood of retracing further below 6600 or if a strong bounce will occur.
Note
Ok, so here is the update on BTC/USDT! As you can see we have opened above the 50 EMA which is a good sign as it helps confirm the area between 8286 and 7858 as good support. However, we now have quite a lot of resistance to contend with being the black dotted trend line directly above, the EMA 200 just above that; AND the heavy resistance between 9080 and the 23.6 Fib level.
It's definitely going to be a bull vs bear battle here to try and push through this convergence of resistance. I have a feeling that given we have opened above the 50 EMA, if we close above it on the daily with some stronger volume (volume is lacking at the moment) then we should be able to push through the down trend channel. In this scenario, even if the 200 EMA acts as resistance we might be able to find support on the break out side of the down trend channel, thus confirming it as new support. If this does happen, we should be in a good position to then tackle the 200 EMA and the first line of resistance above that at 9080!
it's worth noting that momentum on the MACD is still trending upwards, but has backed off just a slight little bit. Worst case scenario is if we are rejected at the dotted down trend line, then we simply bounce off support below it at 7858 and then build more momentum to take it and the 50 EMA on again; which in my opinion is simply delaying the inevitable test of the 9080-9800 level in that is likely to occur within the next 7-10 days.
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