monkia

BTCUSD to 13000 and then down to 8500?

BITFINEX:BTCUSD   比特幣 / 美元
816 6 12
A setup is unfolding that _may_ lead BTCUSD             up to 13,000 and then back down to 8,500

Why up to 13,000 before reversing? 13,000 reversal is supported by the following overlapping indicators
1) We are in a rising wedge (6hr) which typically breaks the opposite direction (down). The point of this is 13000
2) 0.5 Fib level of the 17k to 9k low
3) 50 day EMA (on 1 day chart - note the chart shown is the 6hr chart)
4) Support (4 times) on the way down turning to resistance

Why 8,500?
This is harder to call as it could go through to 7k. But:
1) Resistance zone on the way up turning to support
2) 0.618 Fib of the last ball run (started Sept)
3) Most importantly, it is the medium term trend line established since early Sept

This pattern has happened in almost the identical way in July 2017.

What am I looking for?
I am not saying this is going to happen, just that it may. So I am looking for signals that support this.
1) Reversal around 13k             . i.e. double top or lower high on a meaningful timeframe (3hr or 6hr). If this is a strong signal I will sell, if not, I'll hold.
2) I will put a limit order in at 8,000 for 1/3 of my cash to catch any mass sell offs
3) The remaining 2/3 I will buy in on a reversal signal. Ideally a double bottom or higher low but on a lower time frame.

p.s. I wont be buying BTC             if this happens. I'll buy ETH and NEO and then swap over to BTC             after the initial drop and recovery.
評論: We are in an important area. If it breaks through red box I think we are much more likely to continue on up. To support selling, I would like to see it retest the red box and then break down through the blue support (0.356 Fib at 12300). If that happens, I will probably sell all of my Trading coins (not my core) and target buying those back at the same bottom we had (9400 for 30% gain) and then buying more with cash I already extracted at around 8000-8500. If the break unfolds and then reverses back up, I'll likely buy back in at around 13,700 (10% loss).
交易進行: Double Top, higher low and breaching of the 0.382 are all signals strong enough for me.
評論: We also have support at 11,000 and resistance at the medium term resistance line (diagonal down blue) and the previous support turned resistance at 12,300.

We are in a rising wedge (RW) which is targeting the two resistance lines. A RW typically breaks the opposite direction (i.e. down). It may break earlier, particularly when it meets the 1hr 50 EMA at around 11,750.

I'm looking for the following:
a) Break above resistance. In this case I will start considering closing out the short I entered.
b) Reverse down at the resistance, I'll short a little more.
c) Breaking of wedge early and then breaking the support at 11,000. I'll short more.
評論: Scenario (c) is playing out, the rising wedge has been breached. It could move back up from here to create a wider wising wedge or parallel trading channel. The other move is down to the 11k support area. If this is breached for a meaningful period (at least 1 hr), I would be looking to sell through the rest of my trading coins.

評論: This is playing out pretty much as planned. I'm fulling in cash on my trading coins. I think this is going with the bears down to 7-8k, but let's look at both cases.

Bears
1) Since the start of this bear run from 13,000, we have bounced off the 30min 50 EMA (purple) four times, so that appears to be providing clear resistance
2) There are now resistance lines at 11,000 (tested twice) and 10,700 (tested twice) and one could be forming at 10,400.

Bulls
The 9900 - 10000 area, which is the bottom of the bear run trading channel has now been tested and rejected twice with volume up slightly on this last occasion.

What could happen now?
1) Movement up to around 11,500 which would coincide with the 4 hr 50EMA and the 2nd diagonal down trend line (blue). A reversal back down here would be an opportunity for those who haven't sold their BTC to sell. Breaking through this would open up the 20k+ but could also see another reversal and impulse down on the 2nd blue diagonal (around 14,000).
2) The $10k channel is broken. Probably by trading sideways a bit and hitting the 1st diagonal down trend line (blue). If this happens I expect things to speed up quickly with aggressive drops and then a sudden bounce back, but time will tell.

My actions
If we break through 11,500 convincingly I will buy back in and monitor for a reversal at 14,000 to sell again. Anything else I am sitting tight and will start to buy back in at 9,8,7k levels.

評論: We moved up to the 1st resistance line which is not unexpected, although it happened quite a bit faster than I thought it would so it took out the 50 1hr EMA. It was rejected on both the resistance and EMA but found support at the 10,700.

As discussed yesterday, I'm still bearish unless it breaks the 2nd resistance line. It's now attempting another move up against the 1st resistance line.

We need to let the market tell us, but my feeling is if this fails to break the 1st resistance again at this second attempt there will be enough impulse to drive it through the 10k support.

評論: We are in 'wait and see mode', it has broken the 1st resistance line but lacked the momentum to break (and hold) the 2nd resistance line.

Bears
1) We are in a rising wedge directed to the resistance line. RW typically break down.
2) 30 min chart shows RSI divergence (although this is not present on the more reliable 1 hr)
3) Just touched and went through (not broken yet) the bottom of the upward diagonal green trend line
4) 4hr 50 EMA acted as resistance

Bulls
1) Blasted through the first down diagonal resistance line
2) 1 hr 50 EMA acting as support
3) Very strong support at 10k

評論: New Analysis and updates will now be posted here:

 
評論:  
評論: New Analysis and updates will now be posted here:

I am looking at potential scenario(s) that *might* unfold that might allow me to consider a trade against my plan. These are my personal opinions and not advice. Please do your own research and plan trades that work for your plan.
Thanks for this solid and well-argued analysis. I am fully with you on this.
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monkia icarius
@icarius, thanks for the feedback. An interesting 48 hours ahead I think....
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Support breached. Very little support in place down to the previous low at $9k. I'm now fully in cash for my trading portfolio. Current plan is to buy back a quarter at a time as follows:

9.2k just above previous low
8.7k just above Fib and resistance area

I'll then watch for a double bottom but might buy at these levels regardless of seeing a double bottom:
8k
7.5k
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We are in an important area. If it breaks through red box I think we are much more likely to continue on up. To support selling, I would like to see it retest the red box and then break down through the blue support (0.356 Fib at 12300). If that happens, I will probably sell all of my Trading coins (not my core) and target buying those back at the same bottom we had (9400 for 30% gain) and then buying more with cash I already extracted at around 8000-8500. If the break unfolds and then reverses back up, I'll likely buy back in at around 13,700 (10% loss).

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I am looking at a similar pattern emerging.

I am interested in your strategy:
1) You would sell BTC for USD at 13K on meaningful timeframe? (Personally I think 13800 USD is significant)
2) Good idea!
3) - I am struggling to know how to manage my ALTs in this situation. Can you explain why you would buy ETH and NEO when BTC?#


Many thanks.
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monkia SeekFind
Thanks for commenting @SeekFind

1) I will not sell unless I see the reversal happening as described above (double top, higher low). If that occurs, yes, I will go to USD with some of the BTC I own. Also I will sell proportionally (if not a little more) of the other coins I own (see next point). I have what I called Core vs Trading. I never sell my core because it's never clear what the market might do.
3) If you look at the last few big drops, ETH and NEO drop much more than BTC (look at a chart showing ETHUSD). However, they then come back up much faster than BTC. So you can make about 5-15% improvement buying ETH/NEO rather than BTC. Some of the smaller ALTs (e.g. ETP) drop even more than ETH/NEO but I worry just in case they dont bounce back for some reason.

I hope that helps.
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