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Bitcoin - A Christmas Tumble

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Good day Traders

Here's my synopsis for the festive month ahead.

Bitcoin found the resistance of a large descending channel, is currently testing bearish pennant support and printing a falling wedge on the 15 min for a rise to around $3980, before breaking market structure and dropping to $3500-$3600, where we should have strong trendline support (which had previously held as resistance since the fall from 6k). This is also a 138.2 fib extension from our 29 November high.

I'm expecting a bounce from there to retest $3750 before dropping to $3140 which is a 138.2 fib extension from our 20 November high and is close to channel support. The herd will then be enticed by a bull trap with a long squeeze rekking noobs all the way down from our $3500 resistance to our $2800 major support (161.8 fib extension from the 20 Nov swing high) just in time for Christmas. Whether we have any recovery from there remains to be seen but there still could potentially be a strong corrective move from there to the upside before true capitulation sets in.

If we get a daily close above $4500 then the bias starts leaning to the bulls, but you can see that after each bearish spike, the subsequent bounce follows through with less buying volume. Doesn't look like smart money is even remotely confident buying at these levels so down we go.

Good luck and happy trading!

註釋

We now have strong bullish divergence on the 4H chart and it looks price will move back inside the pennant. We have been moving between a descending channel since our descent from the 29 November high and it looks like bitcoin may potentially move up from here to retest that channel resistance which also coincides with the pennant resistance, the 61.8 fib and the upper band of our bollinger band, so the bears aren't out of the woods just yet. $4100 is strong resistance and if the bulls can take us above that, it might trigger a potential short squeeze. $4500-$4600 is still the resistance to overcome before the bias shifts back to the bulls but it seems this $3750 support is holding for now. If we get rejected at $4100 (which I personally believe we will), then we should test new lows around $3500/$3600.

註釋

Decent short squeeze from just under $3700. There might also be a falling wedge breakout which could potentially take us above $4100 for another short squeeze to our $4300 resistance.

註釋

Here's another reason to be bullish until $4300. Bitfinex shorts all set to get rekt.

註釋

Bitcoin found support at the base of the falling wedge (our $3600-$3700 support) and there is strong bullish divergence on the 1H MFI. I've revised my target to $4150 since we dropped lower into the wedge. This is based on the height of the wedge opening and will be close to a 61.8 fib retracement to the 29 November high.

註釋

It will be interesting to see if my main chart plays out to plan. We first had those failed bull flags, then the failed wedge to invalidate the divergence. I thought $3500 would easily hold on first attempt but we sliced right through it like a hot knife through butter. The only positive is RSI never dropped much so we might have bullish divergence there. Not where I want to be speculating right now though.