Sorry for the lack of weekly updates as of late - markets have been choppy and I've been sidetracked by other writing commitments. When I last wrote Bitcoin had a bit of bullish momentum and was pushing up against the $11,500 resistance and I cautioned that that was not the area to look for fresh longs; the rally topped out a little over $12,000 before crashing down to $9,500. If you followed my Twitter, I bought some spot between $10,600-10,800 on the way down but bailed when $10,600 gave out and have been mostly short ever since. Let's take a look at what the charts have to say now.
On the weekly chart, very little has changed. The support in the mid-$9,000's is still intact, as is the resistance from $11,500-12,000. What has changed is that the support has been tested yet again and my confidence in it holding is certainly low. However, the 21 EMA continues to creep higher and now sits above $9,000 so if the support were to fail, that critical level is not far below. There's both bullish and bearish cases to be made here and it won't be clear which one was correct until either $12,000 or $9,500 gives out. On the bullish side, the weekly chart does represents a bullish pennant and weekly RSI could paint a descending wedge. On the bearish side, this looks like a double top (especially clear on a line chart) with declining RSI and you could argue it looks like $10,600 might be flipping from support to resistance. As mentioned, I'm currently short so it's clear which direction I'm favoring but it's important to adjust to market action.
Support: $9,500, 21 weekly EMA
The Bitcoin daily chart is where things get a bit more interesting. Again, on the bullish side there's a giant bull flag that has been forming for the past several weeks and the $9,500 and $10,000 supports continue to hold. However, I'm finding far more bearish arguments than bullish at the moment. BTC lost the major $10,600-10,800 support and despite the weekly close pump we saw, it was quickly rejected by this level and set up an ugly looking daily candle. $10,000 and the trendline from back in June continue to hold but at this point have been tested so many times that it reminds me of the $6,000 level before the breakdown and I really have no confidence in it holding if Bitcoin doesn't move north soon. RSI and price are both forming descending triangles which is again similar to the $6,000 breakdown, which in combination with the other factors mentioned have me building short positions over longs.
A daily close above $10,800 would make me think about long setups and would bring the $11,200 level to focus. Above here and I think upside continuation is likely, though of course $11,500-12,000 will need to be overcome. If you're not currently in a position, I wouldn't recommend taking a side until either $9,500 or $11,200 gives out.
Support: $9,400-9,600, $10,000
Resistance: $10,600-10,800, $11,200
If price were to breakdown, where am I looking to buy? The first level is the weekly 21 EMA which sits a little above $9,000 right now, not too far below current price. The chart suggests lower to me but I'm not ruling out how important the 21 EMA is (as I've talked about before) so will consider at least buying some spot there. However, the green highlighted area in the daily chart is the area where I'll be placing the majority of my bids and looking for leveraged longs. It aligns with the 0.5 and 0.618 retrace of the entire move, is a strong daily and weekly support zone and will likely fall in line with the bottom of the bull flag. There's also a rather compelling Bitcoin-Gold fractal that was brought to my attention by @TraderX0X0 - make sure to give him a follow. The similarities are quite prominent so I'm definitely watching this closely and it's something I'm evaluating if Bitcoin does indeed break to the downside.
I'm going to be honest - Ethereum looks finished to me on the weekly chart, at least on the USD pair. The first sign was the massive bearish engulfing candle which led to a re-test of $228 support and the 21weekly EMA, both of which gave out in the following week. Now price lost the $200 support and even though it bounced from the $175 level, Ethereum looks to be completing a bearish re-test of $200. I'm short from mid $190's and am expecting $130-155 at some point in the not so distant future. Regain $200 and I'll reconsider my position.
That's it for this week, hope you enjoyed the extended coverage on Bitcoin. Decide to trade Bitcoin based on my charts above? Do me a favor and register at Bitmex, Binance (margin trading now live!) or Bybit which is currently offering up to $60 bonus for new sign-ups.
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