Technical Analysis on Bitcoin: Waiting for a Reaction
I apologize for not being as active in the last few days. I've been traveling and dealing with family issues. That said, I always want to make sure you guys are up to date. Here's a quick overview...
Overall, not much has changed since yesterday. We're still watching and waiting to see how bitcoin will react to the approaching apex on both the daily chart and RSI.
Zooming in on the 4 hour, we can see a wedge has formed. This may be a bearish pennant. If so, we can expect a break down. The question is, how far?
From an Elliot perspective, we could count this as ABCDE. If correct, we can expect a drop to at least the $6K support, and possibly as low as $5,800.
If the bearish pennant is invalidated, we are most likely in an ABC correction. If accurate, we'd expect a break up to complete wave C. There's strong resistance at $6,650 and again at $7,000. Here's how it may play out:
Keep an eye on the 4 hour RSI as well. It's been operating within a wedge. A break above would be a big win for the bulls. Conversely, a drop below may indicate a lower low to follow. As I stated yesterday, if bitcoin drops below the $5,800 support, there's a strong possibility it may drop to at least $5,000 if not lower. The next strong area of support is $4,450.
Bitcoin has broken through the 8 day EMA on the 4 hour chart. It's finding strong resistance at the 21 day EMA. A decisive break above (4 hour candle opening and closing above) would be a major sign of strength for the bulls.
Until there's more confirmation, this is a no trade zone for me. Should you decide to enter a position, I'd suggest keeping your stop-loss tight and NEVER trade with more than you can afford to loose. I know that's cliche, but it couldn't be anymore relevant in this volatile market.
Let's see how the next 24-48 hours play out.
BIAS:
Short Term: Neutral
Longterm: Very Bullish
I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Thanks for stopping by.
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by Workin2005
BTC will surprise everyone. I really hope it can shut the mouth of all those naysayers who refuse to explore the power of the technology and call it a scam etc.
It will...eventually. Maybe not tomorrow, but it will.
forgive my ignorance....what is a support point?
No problem @curtross. Glad you asked. Support is simply an area where price is likely to bounce off of or stabilize. It's often (not always) identified by prior areas of support and resistance. Hope that helps.
@working2005 is this a product of the people invested? Kind of a line in the sand where they will stop selling/maybe buy? That’s the way I’m understanding it so far.
Support is an area where there are many buy orders on the books.
Okay. That makes 1000% more sense to me now. Thanks from someone trying to learn all he can.
My pleasure. I commend you for trying to learn. We all had to start somewhere.
Learning to invest in a depressed market seems scary right now. I am going to invest in buy and hold scenario, so I really want to be sure. Do you know if there is a crypto index of say the top 20 that is available at a small investment, let’s say 500$. My feeling is it’s a good market, but I want to diversify within it. Would it be available over binance?
Binance doesn't offer index funds, but you could certainly invest $500 among a few cryptocurrencies there. I know the "Circle" exchange is offering a "buy the market" option which automatically spreads your funds across all the cryptocurrencies they have on their platform. I've not used it, but that's something you may want to look into.
for providing us latest news from market
@maujmasti
My pleasure!