First, a little bit of fundamentals about what has been happening around the world:
- we had the major meeting at Davos, where Bitcoin and blockchain technology seemed to be a hot topic among the "elites". While the opinions were split, there was a draw there as well; no extreme position taken by any of the "opposing" sides, thus a reading of "work in progress" , "let`s see if we can win something out from this"
- a major hack news with a staggering over $500 million theft left the market / BTC price almost untouched, meaning the market is becoming more and more immune to those kind of FUDs. Draw there as well
- regulatory talks all over the world are taking a milder tone and market participants seem to have acknowledge this. Everybody starts to agree there has to be some sort of legal framework for a lot of reasons thus we are slowly entering the "legal" era.
- a lot of "market movers" aka so called "crypto experts" or "trading / investing experts" were making a lot of "noise" all around Twitter, Steem, "classic" media, etc. either calling a hype or a doomsday ... no big impact on none of the coins
Now, back to our TA.
On the we can notice a few things indicating a perfect stalemate, thus reflecting the situation of incertitude aka consolidation described above.
- first of all we have a symmetrical triangle at the end of a down trend; as we all know, those triangles can evolve either up, down or sideways - very difficult to predict and the only hint that proves useful most of the time is the ; in our case, not much to say, pretty constant all along. We are now entering the weekend and the triangle has space for exactly two more days until it reaches the tip ... still time to think
- secondly, this triangle formed exactly on both sides of a major Fib level, 0.618 or , for Bitsamp, $10945. This level is one of the most common for trend reversals but there is still one more left under it so it can be broken as well - some alts did it just one week ago, when BTC stopped at $9222.
- more importantly the price is exactly at the intersection of a down trend / corrective move with a long term uptrend - the two orange channels on the chart.
- analysis, as it looks now, shows we had a 5 impulse waves up (starting on the 12th of November) followed by an correction that ended on the 17th of January (comprised of smaller 5-3-3 cycles)
- all the indicators are flat, around the middle values ... no momentum either way.
- we do have the 30 and the 50 pointing down but are well above the actual price, so they will have to catch up until they will be able to put some pressure on it; on the down side we have a major buy area between $5000 and $7888 and actually we didn`t even reach the lower level of the current buy area (around or just below $9000)
So, the question is ... what follows next?
At this particular moment, it seems neither the bulls nor the bears are willing to play strong. So most likely until something happens that can move the market - not sure what now, since we covered this part in the fundamentals above - BTC will drag its feet up and down around those levels of mid $11000-ish to mid $10000-ish. If we look at the weekly chart, we are still in a good uptrend, so the up side might be in a better position however this a very long time which takes time to manifest. Still no definite clue on the shorter term.
As a final word just a bit of a warning to any "fast draw" trader / investor, mind the bull / bear traps; it seems lately there were a lot of them and in such market conditions will sure be plenty more
- the stocks have bears and bulls
- FOREX has doves and hawks
In order to gain a strong foothold as a distinct market, what should the cryptos have? :)
It can be seen the symmetrical triangle resolved nicely and abcde cycle with a break on the upper side and with a few consolidation candles afterwards (thus the probability to be a bull trap is smaller). Also, the shape of the breakout looks like a bull flag.
There is nothing confirmed yet at this point, is just a weak, fable signal that things might go up.
On the way up, there are a few obstacles, like the first down trend line (dotted blue) then 30 EMA daily plus 0.5 Fib level. The last leg of the bat will meet the second down trend line (dotted blue as well) and maybe the 50 SMA. If you want to try, this is a very risky trade so good luck.
In the great scheme of things, I am very confident this was the end of the down movement and now BTC is starting the long way up towards $13000. Besides the fact we had this perfect $9333 (like so many times before at reversals points) marking a very close double-bottom with the previous low of (yet another perfect) $9222, on the 4h chart we can see the fractals repeating. The only difference was the length of time, we were in a slightly "stretched" version - instead of 8 days it took 13 to develop.
Moving forward, I think I will close this idea and start a new one once we have a confirmation of the above (the up trend towards $13000-ish, for a test of the medium term down channel)
Here is the chart I am looking at:
Thank you for watching / following / commenting and good luck with the trades
The key in all those investments is money management: always use money you will never regret losing and out of this money, only use 5% to 10% max to initiate such a long position. If it pays out, in the long term you gain a lot. If things go south, 5% out of something you won`t regret anyway ... is just like enjoying a coffee :)