Anytime Bitcoin dumps it is scary. But, it is also important to watch some key spots and levels at a longer timeframe to avoid any rash decision making. Let's take a look.
1. Price: Well, obviously price has dumped. But it also got support at the critical 21 week EMA. Now we need to watch another day, maybe another couple of weeks to see if weekly candles close above the 21 week EMA. It will be a good buy confirmation if price closes above 20 week SMA level this week and holds for another couple of weeks. If BTC goes sideways in a range 46 - 58 K level for the next few weeks, it will be a really big buy opportunity. When BTC puts in a long term structure above 21 week EMA, there have been a few times price has broken down below. So, it is important not to front run anything. I am planning to nibble at each drop and take profit a little only to buy back again. But, this plan requires constant monitoring and keeping capital safe.
2. Patterns: Obvious pattern getting displayed here is an ascending triangle. The apex coming in at around mid July. So, it will be critical to see price holding within the triangle range. This week would have been 70% of the full triangle formation. So, if we don't see a major breakdown below 21 week SMA in the next 24 hours, the bias goes to the upside. Bitcoin likes to fake out a lot, so watching at longer timeframes keeps noise to a minimal amount. Most cases for Bitcoin ascending triangles have resolved to the upside.
3. Volume: We see volume divergence here. BTC is still maintaining a higher low posturing as volume is dropping off Since the February dump. Volume can still keep dropping of as price floats up. It can climb the wall of worries to 100k. Or as we have seen this week, the volume has increased with the selling. If the next couple of week slow down as price recovers/stabilizes and then we see a green volume spike, it will be go time.
4. Indicators:
a. RSI: Weekly RSI is creating a major bullish divergence. With lower lows as price is maintaining sideways to higher low posturing. RSI is now at a critical support level and also got the support on the descending trendline. If RSI falls below 55 level, it will be very concerning. But if we see RSI flattening or picking up in the next couple of weeks, it will be a damn good buy signal.
b. ADX/DI: DI plus is still above 25, but DI minus is catching up. We don't want want t see a cross above 25. As long as DI Plus maintains above 25, and ADX remains above 40 level, the long term continuation is still in the books.
c. EMA/SMA: If price can keep closing above 21 week EMA, we need to monitor 20 week SMA to flatten up and cross below 21 week EMA. It might take a few week to more than a month, but as long as the two moving averages don't diverge too much the long term trend is still active.
So, when to buy this thing? As I said above, I am nibbling and bottom fishing a little, but it is not a good time to buy yet, if you are not constantly monitoring. The good start buying will be at above this week's open around 58 K, with the indicators moving at a bullish posturing. If anyone is watching the BTC hash ribbon, it is also a good indicator of when to go in hard and heavy. I still do not believe the bull market is over. As long as BTC closing above 21 week EMA, it is still very much intact. Let's see what happens; good luck out there!
1. Price: Well, obviously price has dumped. But it also got support at the critical 21 week EMA. Now we need to watch another day, maybe another couple of weeks to see if weekly candles close above the 21 week EMA. It will be a good buy confirmation if price closes above 20 week SMA level this week and holds for another couple of weeks. If BTC goes sideways in a range 46 - 58 K level for the next few weeks, it will be a really big buy opportunity. When BTC puts in a long term structure above 21 week EMA, there have been a few times price has broken down below. So, it is important not to front run anything. I am planning to nibble at each drop and take profit a little only to buy back again. But, this plan requires constant monitoring and keeping capital safe.
2. Patterns: Obvious pattern getting displayed here is an ascending triangle. The apex coming in at around mid July. So, it will be critical to see price holding within the triangle range. This week would have been 70% of the full triangle formation. So, if we don't see a major breakdown below 21 week SMA in the next 24 hours, the bias goes to the upside. Bitcoin likes to fake out a lot, so watching at longer timeframes keeps noise to a minimal amount. Most cases for Bitcoin ascending triangles have resolved to the upside.
3. Volume: We see volume divergence here. BTC is still maintaining a higher low posturing as volume is dropping off Since the February dump. Volume can still keep dropping of as price floats up. It can climb the wall of worries to 100k. Or as we have seen this week, the volume has increased with the selling. If the next couple of week slow down as price recovers/stabilizes and then we see a green volume spike, it will be go time.
4. Indicators:
a. RSI: Weekly RSI is creating a major bullish divergence. With lower lows as price is maintaining sideways to higher low posturing. RSI is now at a critical support level and also got the support on the descending trendline. If RSI falls below 55 level, it will be very concerning. But if we see RSI flattening or picking up in the next couple of weeks, it will be a damn good buy signal.
b. ADX/DI: DI plus is still above 25, but DI minus is catching up. We don't want want t see a cross above 25. As long as DI Plus maintains above 25, and ADX remains above 40 level, the long term continuation is still in the books.
c. EMA/SMA: If price can keep closing above 21 week EMA, we need to monitor 20 week SMA to flatten up and cross below 21 week EMA. It might take a few week to more than a month, but as long as the two moving averages don't diverge too much the long term trend is still active.
So, when to buy this thing? As I said above, I am nibbling and bottom fishing a little, but it is not a good time to buy yet, if you are not constantly monitoring. The good start buying will be at above this week's open around 58 K, with the indicators moving at a bullish posturing. If anyone is watching the BTC hash ribbon, it is also a good indicator of when to go in hard and heavy. I still do not believe the bull market is over. As long as BTC closing above 21 week EMA, it is still very much intact. Let's see what happens; good luck out there!
הערה:
We still have weekly close above 21 week EMA. Upside bias is still intact. Doesn't mean price wont explore some downside targets first. Below 40 K is a possibility.
הערה:
We've got below 40k. The real test is the next bounce. If weekly price fails to close near or above the 21 week EMA, we cannot rule out a medium term downtrend to continue for the next couple of months. As long as weekly close above 28k area; the last higher low, BTC is not in a full on bear market. All the concerning factor have come to fruition, and all the hopeful things have gone out the window for now. So, the best thing right now is to sit back and watch things play out; may be a short or two here and there and short term bounce plays.
