As mentioned in the last market update, it was only a matter of time until Bitcoin tapped that $11,500 weekly resistance. However, what came after was the real surprise, with a rocket straight up to nearly $14,000 followed by a $3,000 sell off. The end result is what we're looking at today with the weekly closing just under $11,000 and forming a shooting star.
Bitcoin Weekly
Bitcoin blew through the $11,500 resistance and went straight to the next which had confluence with the 0.618 fib at $13,600 before quickly selling off and closing back under the resistance it had blown through. The net result is a pretty ugly shooting star candle made worse by the close below resistance and the double-toppy looking RSI and OBV. The combination of these factors sets up a short-term bearish scenario, however Bitcoin is sitting just above that weekly support block so ruling out a move to the upside would be naive. That being said, the odds are on the bearish side after a move like that and further retracement after such a move would not be unhealthy. Hopefully everyone was moving stops up as price continued higher and manage to lock in some healthy profits. My stops were mostly triggered on the break of $13,500 and I've been sitting primarily in Tether ever since waiting for the market to pick a direction. So now that the weekly has closed, what is Bitcoin going to do? I think price could move higher in the very short term, as late shorters rarely get to profit, but it's unlikely to gain traction above the prior week's high ($11,300); if it did, that would be a situation to consider long opportunities. Overall, I'm expecting price to make further moves to the downside and the levels on the chart are fairly clear. The first level is the lower end of the weekly support which is confluent with the 0.382 fib around $9,600. I think price is very likely to find this level in the coming days and, depending on the reaction, this may offer a great buying opportunity. It wouldn't surprise me to see even further downside to the mid-high-$8,000's which is the only recent level of weekly support and represents the prior monthly open as well. Lastly, there's the 21 EMA which typically gets tested several times during a bull market. A move to either of these latter two offer the best buy the dip opportunity Bitcoin may present (if price even gets there). On the flip side, Bitcoin's local low may be in; if that's the case, watch for $12,000 to be reclaimed then look for longs.
Support: $8,200-8,800, $9,600-10,400
Resistance: $11,500-12,000
Bitcoin Daily
The daily closed below the previous low, right at the 50% retracement level. Overall, my bias is strictly bearish until the weekly open is reclaimed and I'll continue to lean bearish unless $12,000-12,400 is reclaimed. The only real daily support in the proximity of current price is down around $9,400 which has confluence with the 0.705 fib and in all likelihood the 50 day moving average; below that is $8750. There's a case to be made for a short on a slight bounce but my main strategy right now is long a close above $12,400 or buy the dip somewhere between $8,500 and $9,900.
Support: $9,400, $10,800
Resistance: $11,800-12,400
That's it for this week - if you want more regular content, be sure to follow me on Twitter. Decide to trade Bitcoin based on my charts above? Do me a favor and register at Bitmex, Binance (margin trading coming soon!) or Bybit which is currently offering up to $60 bonus for new sign-ups.
Make sure you don't miss the latest reviews & tips from Crypto Advocate. Subscribe today!
Disclaimer: this is not financial advice and cryptoadvocate.net is in no way responsible for any claims, losses or expenses that may result by following information available on this site.
cryptoadvocate.net may be entitled to referral bonuses when readers make use of referral links on cryptoadvocate.net