Bitcoin is hanging at the top edge of the no trade zone established over the last 6 months, this is a classic area for price to turn around so watch for a big market breakdown around this $5,235 price level. If you have been following my trades you will see that I have flagged it as a good shorting level.
As well, we can see there is a formation (red line) spanning the entire length of the bear market that used to be strong support but is now resistance; bitcoin is unlikely to break it on it first try around. The confluence with the top edge of the no trade zone reinforces the idea that this a convenient area to short the market.
Turning to the Gann lines, we can see that bitcoin cleared the 3/1 Gann, but it remains untested. It is unlikely that the 4/1 Gann will be breached as a result. Testing the 3/1 Gann line means descending below $3,843, but this is a bearish confirmation level which will induce plenty of selling.
The declining trade volume on the CM indicator supports the bearish picture, so I expect bitcoin to retrace sharply with increasing volume to around the $2,000 level which would complete a symmetrical corrective structure ("measured move") that is common in crypto.
How to gauge the measured move?
A corrective structure can be measured on the weekly log chart, where we can see that the all time high of approx. $20,000 to $6,000 was a -67.74% move. Now if we extend that percentage from the break of support at $6,000 we get a measured move target of $1,991. Since there is a downward slope to the support/resistance level we can also estimate a measure move for a "wick target" of $1,740. So be sure to pepper some buy orders around that wick target ;)
PS. Bitcoin dominance looks to be very bullish, so expect altcoins (ethereum, litecoin, etc.) to drop even harder than bitcoin.
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For play-by-play please follow this idea:
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BTC vs. Silver
PS. I caught the short trade on Silver here:
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The trade associated with this idea has been revised and can be found here:
@BlockchainYahoo, this is what i see in your chart...we just finished the left shoulder...now btc will carve out the head...this is going to form the IHS which will break out next year...
This huge drop you've drawn, I believe it is very unlikely, straight down for months... Never seen before.
Remember that we have very strong support at MA200. And EMA200 is also strong on the weekly.
Here is my latest chart, see what you think:
Namaste.
Trader6127
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@alanmasters, I think traders would be much more interested in specific price levels for entering and exiting the market with defined risk. Your chart does not show this.
AlanSantana
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@agency, I do share these but as trades. This chart above is just a general analysis.
I understand your point and appreciate the feedback.
Namaste.
BorisPoff
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BITSTAMP:BTCUSD printed 5790 this morning. That’s over $550 above the price level ($5235) that you flagged as good for shorting, and $650 above the price at the time of your post, which was $5,140. Anyone taking into account your advice (as educational content of course) would be pummeled again, similar to your previous educational content on March 30.
Some people were saying that after bottom is reached and reversal signs are clearly visible (higher highs, higher lows) then one should be cautious about shorting. Multi hundred dollar spikes - short squeezes and organic growth alike, would manifest the reversal further.
It was also said, that the herd will cling to the old pattern and ignore the signs of reversal. Happens at the top, happens at the bottom. We aren’t at the top. Chances of it being the bottom are high. Not guaranteed, but high. Educating people not to short during these times would be a reasonable thing to do.