Bitcoin - Weakness First Target $3600 reached - Watching for more downside
Bitcoin Pull Back Started - Is It Over? Probably Not
Daily
Bitcoin had been showing weakness in price action over the last week and finally gave into a steep pullback when it lost $3808 hitting our first target of $3600 on the nose. Since dip buyers have come in and Bitcoin has staged a little reversal due to its oversold conditions. So the question is, will there be more downside? I believe so despite that beautiful reversal candle stick. I am watching volume, buying and selling pressure.
4 hour
Looking at the 4 hour chart, during this oversold bounce Bitcoin is finding its resistance at the 68ema, approximately $3950. While the Stochastic RSI is showing that it is due for a full cycle, this can take a long time to develop and would require a lot of bullish momentum, heavy buying. Take note of the MACD which is in a corrective mode, heading to deviation zero. In this case, I observe the MACD for curling to signal reversal and if it occurs, is their bullish momentum behind it (volume).
1 hour
On the hourly chart, bitcoin is actually forming what is known as a "V" bottom, characterized by the single candlestick wicking up into a bounce, forming an equal and opposite angle of reversal. Its Stochastic RSI is in the midground, this is neither bullish nor bearish. V-Bottoms always require a backtest and this one must hold.
15 min vs. 30 min
On both the 15 minute and 30 minute time frames we are observing a stochastic RSI that has already reached the top of its cycle. Notice the down trend line at $3600 that Bitcoin bounced off of to set a lower low during this trend shift. Note resistance on the 15 minute at the moving averages again. In order for bullish momentum to continue we need to see lots of buying pressure, volume and positive money flow.
If bitcoin rolls over here it will begin a strong pattern of lower highs and lower lows. In trading, patience is often key and here we have what is known as a mid-ground trade, an either way trade. I still maintain my bearish stance on bitcoin and believe that this is just the start of an over due pullback. The continued crossing of moving averages, short below longer term re-enforces this outlook. $3808 was the line in the sand that led to $3600. $3600 is now the line in the sand that will lead to $3k.
Trade: wait for volume confirmation to take a long position.
Alternative: Monitor the ALT coins for more bullish action which last night led the down turn in bitcoin.
I will review LTC ETH BCC NEO later/throughout today when I have more time. If you guys have any requests for charts, feel free to comment them and I will have a look!
Previous Articles:
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Weekly Overview
ETHUSD
bullish setups
Follow at your own risk, Not a financial adviser, understand the risks associated with trading and investing. Manage your own Risk - in other words you could lose it all and I could give a fuck.
Loved the in depth analysis here @satchmo. Thanks for you insights.
quite welcome! Very interesting the crypto market is! Very exciting stuff happening!
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target...you sound happy about this...
yes I am, means play in the alt coins. I am still holding my BTC and will use this opportunity to accumulate more. I think in BTC base currency!