Also, its forming a and looks exhausted. My guess is that we might have enough to do a quick blowoff to $11800. Then pullback.
If bitcoin catches support at $10800, it could easily go to $12800.
As I said in my last post, I this type of price action really bothers. I don't like big moves with no retrace on the 4 hour chart. Just way too often in the past when we've bounced of an aggressive move down, these moves end up being a bull trap that ends in a lower low.
I am certainly open to the case and I actually really want to be long term. I just think the market needs to find a bottom and flatten out before it resumes a bull trend.
If we pullback and build support between $9k and $10k then break out of $13k, build support, I'll feel much better about going long.
When everyone's it usually pays to be a little cautious, book some profits and see what happens. It would be extremely rare to go up $5k and then never pull back so the risk of taking profits here is really low.
Bitcoin dropped $1100 and has retraced 50% of the move and currently consolidating near $11k. The first solid support zone is the .382 at $10200. More likely, if this is a 3rd wave retrace it goes to 50% of the wave at $9800. For bulls, thats a good spot to add. And I think its quite possible to get another bullish move to that $12800 point from there.
Below $9700 it went straight up and never built any support so if $9700 doesn't hold the chances are good it goes all the way down to test the breakout at $8900. The red line is the 50% pullback of the entire move up from $6k. The thick red line is the 61.8% at $8100. A pullback there would actually make the move stronger, but below $8k and this market would be in danger of making lower lows.
The move down retraced 50% and now formed a head and shoulder that broke through last night and where the neck line is currently being tested.
The next level of support is in the $9800 area, but that isn't necessarily strong support. The strong support is at $8800, which is now the 1 to 1 extension and the head and shoulders measured move target.
That is the big problem with moves that go straight up and don't build support. Price went up because there were no sellers. But without a few day of consolidation in here, there is no area where buyers will defend their position. If selling momentum continues, then it gets bad and we can quickly lose those gains.
Bitcoin has dropped $2500 in the last few days. But its coming up on a big support zone and it looks like selling is starting to exhaust for now. Unless some bad news comes out Monday, there is a good chance bitcoin finds a temporary bottom between $8700-$9300.
The move down was fairly slow and choppy. Not as aggressive as I would have thought. So we need to pay attention to price action and wave structure of the is move up. Though I don't think its likely, bitcoin could still go on another FOMO run to $12-$13k.
So I covered shorts and working on building a long position. I'll look to take profits at the fibs and look for signs of it turning to reshort. If I don't see any, then I might just stay flat until I get a better idea of the next move. Sometimes the market is just hard to read and having no position is the best position.
In my last comment, I explained that I went long as the downtrend was exhausted.
Bitcoin traded a low range from 9300 to 9800 that has now been broke with a huge 4 hour range bust bar. The move down was also chopping and corrective.
At this point, as a trader, its important to adjust. I now expect bitcoin to go much higher. Possibly breaking up to $13k. $10k is now major support so unless this market breaks much lower in the next few days, I will not be trying to short this. The probability of the bitcoin going higher just went up big time. So we get long and wait. Stop at $9800.