What's Holding Bitcoin Down?

已更新

This will likely be my last Bitcoin chart before I feel like we've confirmed our bottom and exited the bear market.

As you can see, three main resistance lines on the linear chart are holding us in check, all of which have been present since the beginning of 2018. These are the resistances that need to break in order to end the bear market, and it's anyone's guess as to how long this will take. The dark red is the main "meme triangle" resistance. The light blue is another triangle resistance since July 2018, and it is currently forming the top of our falling wedge. We briefly broke out from it in the fall, but the market was too weak to follow through. We almost bounced there when we first broke down from 6K, but it was the breakdown of that line that truly sent us into freefall. We have ultimately followed that downtrend from July until this very day. It has many touches––only one of which resulted in a breakout. Needless to say, that doesn't inspire confidence in the market. The bright red line is the ATH-tether pump-breakdown resistance. We've managed to hold above it/ride along it for a bit, but the more powerful resistance seems to be the light blue.

We still haven't tested the bottom of the wedge or the 200W EMA, so we may have to do that first if we're going to move up from here. If that fails to hold, we will likely have our "final" drop of the bear market. We then can judge the strength of the market based on the reaction to extreme lows and see if we have enough momentum to reverse and break our resistance lines. We'd need a huge spike in volume to do that, and for now, the volume is still weak.

Bitcoin also has support in a possible long term linear uptrend (in purple). Interestingly enough, this line converges nicely with the end of the falling wedge, and this could provide a powerful bounce. This is why my scenarios use this line as a potential pivot area.

The three scenarios outlined here aren't ALL the possible outcomes. These are all long term bullish scenarios. However, on a log scale we broke down from our major uptrend and are currently looking to form a new trend. The true bottom is anyone's guess. Bitcoin has been around for 10 years, and has recovered from much worse. It's unlikely to go to zero, but it could stall and flatline for many years.

My bearish targets for some top coins are as follows, IF we break down:
ETH - $24-27
LTC - $5-8
NEO - $3-4
XRP - $0.08-0.10
XLM - $0.01-0.03
TRX - $0.01 (will likely not achieve a new low, based on its strength)

This is not financial advice. This is for educational and speculative purposes only.

-Victor Cobra

註釋

Zoomed in, so you can see the significance of these lines in dictating current price action:

註釋

By the way, if we do happen to make a lower low from here, the RSI could easily print a major bullish divergence. This will be the signal that the final bottom is in.

註釋

As I expected, based on the low volume, we’ve slid down. Alts are dropping back to the levels they were at when Bitcoin hit its recent daily low. Some, including NANO, have now retraced their entire pumps from last week. This is NOT a good sign. The only hope would be for this to be the final “bear trap” before the end of the downtrend. We have to see how Bitcoin reacts to its next high volume move. We’d ideally need a quick rejection off the bottom of the wedge, as I’ve outlined in my green scenario. The ultimate target for the breakdown could have us wick slightly below $1000 if it proves to be powerful enough, but the initial targets will be somewhere in the $2600-2700 area. We could then head towards $1600-1800 from there.

註釋

A bullish scenario would involve the bullish divergence playing out if we make a lower low (ideally in the $2700-2900 area)

註釋

Whatever happens, the trading move would be to long the confirmed breakout of the wedge or short a breakdown below the 200W EMA

註釋

That's the 200W MA, not EMA. We are currently BELOW the EMA, which isn't a great sign, since we held it during our last bear market.

註釋

Moving up on low volume, and we just made another lower high within the wedge. Chances are greater for a major breakdown, I think. This is truly a slow and painful death. I don’t think the 200 MA will hold if the breakdown happens, simply because not enough people are excited to buy here. I think more people would panic sell there than buy, although I could be wrong. If we do happen to break out above the wedge, it needs to get above 3600 quickly on high volume and not get rejected, as we’ve seen with every attempted rally. That’s it for my updates. I’ll come back when things have played out.

註釋

Okay so we’ve held this level so far with some increasing volume. This tells me that we have a greater chance for a push up than I said earlier today. Pretty much could go either way....but with so many people expecting a drop...it makes me wonder if thus really is the bottom. Alright, bye for real. About to travel soon.

註釋

Popping in for a #ec. We’ve technically broken all the close resistances I was looking at but have not made a significant push up yet. We are still within the general confines of the wedge with decreasing volume and price. These are actually bullish signals, so I would say the r/r favors the long trade here. Additionally, LTC has continued to look strong, and it wouldn’t take much to send it on a significant run (targeting $60 and then $100), if it breaks resistance between $34 and $35. XLM has finally started to bounce as well. Buying here, or going long with a reasonable stop loss might be rewarded. I’m also noticing that many of the people who initially called for a 3K bottom when we were still above 6K are now calling for lower prices, probably for fear of not timing the exact bottom and harming their track records. This is the sort of thing I’d look for, as a contrarian. Anyway, that’s it for now!

註釋

How about that timing? Good thing I bought some LTC in that range. We actually don’t have any major descending resistances until the dark red line now. This in theory should be a comfortable long position. I’ve been entertaining the idea of a reversal soon (as you can see with my long setup). It took a little longer to play out than I had expected, but there it is. Alright, going to enjoy the rest of my trip :)

註釋

By the way, if this is our bottom, our new potential log trend line could end up being something like this (dotted red)

註釋

Bitcoin is starting to look weak now, unfortunately. Volume is increasing on this minor breakdown, which isn’t a good sign. Bulls have nearly run out of time to push this thing up further, so a bigger pullback or even a big drop can be expected. We need to see buyers step in very soon to avoid thus scenario. Some alts are continuing to look very bullish, but they can dump fast if the market takes a turn. Some alts, like XLM and even NANO are continuing to show signs of weakness.

註釋

Bitcoin really looked like it was about to break down, but we’re back up with steady/increasing volume. NANO has made its way back above support, and I generally see this as a very good sign for Bitcoin. Additionally, ETH looks like it’s very close to breaking out of a downtrend against Bitcoin that has lasted nearly 2 years.

註釋

Bulls have shown increasing strength, so we might be in for a powerful move up now. I've actually been eyeing 8K-9K as a potential reversal target (you can see this in my Bitcoin long setup). This is assuming ETH makes a MAJOR breakout here and the whole market turns extremely bullish. Below is why 8K is a POTENTIAL target. We are more likely to get stopped at the lower blue line in the mid 5K's. These are the best case scenarios, as I see it. We could always stop lower and head back to retest 3.2K, as we did in the previous bear market.

註釋

This consolidation is taking a bit longer than expected, but the bullish view has NOT been invalidated yet. In fact, we may actually be sneakily breaking out of this falling wedge and testing it as support. I believe we did the same before the last big upswing. Alts are still looking relatively bullish as well. However, if we don't see a push up by the end of today, chances are we will have to drop to find more buying momentum. As I've said before, I don't like entering a weekend with weak price action.

註釋

We also have a rather large POTENTIAL inverse head and shoulders pattern on the daily chart, which would easily produce a powerful breakout towards 4200 if the neckline is broken. The fact that we're still consolidating just under that resistance without alts dropping is a very good sign that the market is looking more bullish than bearish now. I guess we'll see what happens.

註釋

I have a feeling patience will be rewarded here. Time to go out and enjoy my day.

註釋

The market is looking pretty good now. My feeling was right, and we ended up breaking out of our short term falling wedge to the upside. It looks like we may follow my green scenario, and test the major downtrend resistance (dark red). If we break out from there with conviction, the target is $8-9K for an initial spike, and then probably back down to 6K for some sideways action.That's the BEST CASE scenario, in my opinion.

註釋

We’ve stopped short just around the level for most exchanges. Volume is decreasing now, but we haven’t seen much of a drop in price. Alts are either making small corrections, riding support, or just starting to look bullish again (take XLM for instance). While the decrease in volume is a little concerning, this can happen during consolidation before the next move up. The bulls have worked hard to break some MAJOR resistances recently, so they need a bit of a rest. We could simply drift sideways here for a bit, building buy pressure just beneath 4K, or we could correct back to the 3700-3800 area. Building a flag here would increase the likelihood that we are just in the middle of a larger impulse. I’d look for another spike in volume over the coming days, either way. If volume fails to return, we will likely head lower and go sideways for a while.

註釋

We’ve broken out above 4K with volume, which is good, but it hasn’t been that big of a move so far. On Binance, we just wicked to the exact high from December. Someone really doesn’t want us to make a higher high on that chart, as it would confirm the end of the near market. This is a subtle effort by the bears, but it might psychologically impact price action over the next several days. If that area can be broken, it won’t necessarily confirm that the bear market is over, so many people will feel confused.

註釋

And, as I kind of suspected, we've seen a drop. This drop was a lot faster than I expected, so I wasn't able to sell some of my ETH and LTC that I bought much lower. Oh well. This is why I don't day trade much. So far, there's no reason to really panic. The market needs to test to see if it has any legs, and this is what happens when you go up slowly without correcting. It's not good that we've formed a long wick on the weekly chart, like we did in October, as this could mean we're in for a breakdown below 3.1K soon. HOWEVER, we're currently supported by the broken triangle resistance, and if bulls step in here, we can quickly head back up towards 4K.