All according to plan for bitcoin
Welcome to August. Bears/Ravens kick off the NFL preseason tomorrow night with the annual Hall of Fame game and thank god football is back.
Let's first take a look at the daily chart that I've been showing with a falling wedge formation and the fib levels from the run-up of the '17 market cycle. Things are so far going exactly according to plan, which frankly makes me a bit nervous. There's almost always a new wrinkle to throw traders off, but if you refer back to my big fractal comparison, we appear to be right on track per the '13 cycle.
https://steemit.com/bitcoin/@voluntarymess/btc-big-picture-friday-2013-and-now
Price action rose up temporarily out of the wedge, tapped the 618 fib level, and is now diving back into the wedge where - if history rhymes - it will drop to the 786 fib level and possibly dive down to a historic level of resistance/support. It's possible this level is either around 4800 or down to 3500. I can't imagine the price dropping to the next level of support below 3500... people would be pulling HELOCs to get in.
OK. If we work with the assumption that this is still very much a bear market, then we need to trade with that in mind. Per yesterday's article, if you're trading with leverage on Bitmex or another similar platform with perpetual futures contracts, longs are still paying shorts. This could indicate that the crowd still believes this is a bull market, that the bottom has been put in and bitcoin is ready to embark on the next rally. I think not.
On the daily chart I've highlighted a "Key Area" which is shown below on the hourly. This chart shows bitcoin jumping up out of the trend line of the wedge, and just recently coming back under it. If price action behaves as it has been behaving, there will likely be some chop through today and then look for a possible drop down to the previous level of resistance where bitcoin broke the neckline of an inverted head and shoulders pattern two weeks ago. A great short-term target would be the 6750 zone, if there are no warning signs that the bear market has ended. If however, the price leaps out of the wedge again, it would be wise to reconsider where we are at in the market cycle. I'll certainly post an update if we close a few candles on the up-side of the wedge trend line.
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I will be looking for entries to short, but keeping my head on a swivel for signs of a trend reversal. My bias will be with the bears but profit is the goal - if the bulls take over, consider me converted.
As always, stay safe fam.
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