Bitcoin facing a multitude of resistance in the coming wks/mnths
It seems that Bitcoin has made quite the run from it's December lows moving from sub 3k to almost 14k. While surging in a parabolic attempt to reclaim new highs, it failed at the critical 61.8% fibonacci level from all time highs in 2017 or around 13.5k. In bitcoin bull markets, 30-50% corrections, which is what we are seeing from the local top of 13.9k back down to 8k, would indicate that this is a great time to start scaling in. The question we now ask is; Was this last run the beginning of a bull market or just a failed attempt to touch highs before further consolidation that could last up until May 2020 (Bitcoin Halvening).
A breakdown below the 21 Week Moving Avg and failing to break through critical points of resistance, says that this correction, can be extended, but remains healthy for Bitcoin's long term outlook.
Bearish Outlook
A retest of the purple resistance line should be expected in the coming weeks and pending the outlook of this move, it seems more likely that a rejection at the purple line and 21 W MA and further drop below 8k towards the critical 6.5k resistance line seems to be the most plausible outcome. In my opinion, a real bull market can resume when we see one or both conditions met:
1. Reclamation and close of 21 W MA (currently at $9700)
2. Reclamation and close above Red S/R line
Until then, we shall proceed as cautiously optimistic as this could be the short term move down before a continuation up to retest all time highs.
Bullish Outlook
An interesting point to note is that we have seen in one of the previous BTC bull markets have very similar price movement. While the 21 W MA as served as support during bull runs and resistance during bear markets, we have seen BTC dip below the 21 W MA, before quickly reclaiming and resuming the bull market. The difference between that time and this time is that the 21 W MA was above the red line of support which has held as very strong support and resistance level over the last 5-6 years. If we were to have closes above both the red line and 21 W MA, then it would be safe to assume that our bull market can continue on its upward trajectory and retest the 20k range.
Ending Statement
All in all, it seems that the 9.3-9.5k range will be very important for BTC, and we should see a retest of this area in the coming weeks. To see a rejection at that area (Purple Line and 21 W MA) would be bearish in the short-intermediate term where we should definitely test the 6.5k range and possibly lower. This could be an extended consolidation in between the black and purple line lasting until May 2020. This could be considered an accumulation phase and would be an excellent time to scale in and accumulate.
Right now we have seen the 30-50% correction in BTC. This has historically been an excellent time to scale back in to BTC during bull markets before continuations to newer highs. However, we have to be cautious, as we have broken below some major support/resistance levels. Reclaiming these levels will be the first steps to continuing this bull run. I have to ask myself; was this run a failed attempt up before establishing a consolidation/accumulation range or are we really in a new BTC bull market?
A breakdown below the 21 Week Moving Avg and failing to break through critical points of resistance, says that this correction, can be extended, but remains healthy for Bitcoin's long term outlook.
Bearish Outlook
A retest of the purple resistance line should be expected in the coming weeks and pending the outlook of this move, it seems more likely that a rejection at the purple line and 21 W MA and further drop below 8k towards the critical 6.5k resistance line seems to be the most plausible outcome. In my opinion, a real bull market can resume when we see one or both conditions met:
1. Reclamation and close of 21 W MA (currently at $9700)
2. Reclamation and close above Red S/R line
Until then, we shall proceed as cautiously optimistic as this could be the short term move down before a continuation up to retest all time highs.
Bullish Outlook
An interesting point to note is that we have seen in one of the previous BTC bull markets have very similar price movement. While the 21 W MA as served as support during bull runs and resistance during bear markets, we have seen BTC dip below the 21 W MA, before quickly reclaiming and resuming the bull market. The difference between that time and this time is that the 21 W MA was above the red line of support which has held as very strong support and resistance level over the last 5-6 years. If we were to have closes above both the red line and 21 W MA, then it would be safe to assume that our bull market can continue on its upward trajectory and retest the 20k range.
Ending Statement
All in all, it seems that the 9.3-9.5k range will be very important for BTC, and we should see a retest of this area in the coming weeks. To see a rejection at that area (Purple Line and 21 W MA) would be bearish in the short-intermediate term where we should definitely test the 6.5k range and possibly lower. This could be an extended consolidation in between the black and purple line lasting until May 2020. This could be considered an accumulation phase and would be an excellent time to scale in and accumulate.
Right now we have seen the 30-50% correction in BTC. This has historically been an excellent time to scale back in to BTC during bull markets before continuations to newer highs. However, we have to be cautious, as we have broken below some major support/resistance levels. Reclaiming these levels will be the first steps to continuing this bull run. I have to ask myself; was this run a failed attempt up before establishing a consolidation/accumulation range or are we really in a new BTC bull market?
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