Bitcoin Consolidation - Preparing For The Next Move
Diupdate
Hey guys. A quick Bitcoin hourly chart for you. As support, we have our long term bullish channel. You can see that zoomed out: 
We also have a mid-term uptrend as support. This rising trendline could help us form an an ascending triangle pattern on the 8200-8400 resistance. Volume is decreasing at the moment, which shows that there is some buyer exhaustion at these levels. This means that in the short term, we may need to test support in the 7500-7600 area again. If that area fails to hold - as mentioned above - we have support at the light blue channel bottom (currently in the 6900 area). If Bitcoin cannot sustain within this bullish channel, the likelihood that we've reached top for now will increase. If volume continues to drop as we move sideways and form a potential ascending triangle, we could actually see a breakout eventually towards 11.4K at least (top of the channel). Volume indicates demand and confidence. Declining volume can indicate exhaustion and uncertainty before an eventual continuation of the trend. OR it can indicate that a trend reversal will soon occur. We won't know until it happens, but it almost always declines during consolidation.
Circled in yellow is a potential fractal, if this breaks to the upside. As you can see, it at first looked like a double top, but instead broke out above. The difference between then and now is not only size, but that Bitcoin made a lower high on the second top this time around.
We're seeing some nice moves from altcoins today. It's especially encouraging to see ETH moving up, since it means that even though Bitcoin has stalled for now, there is plenty of strength in the crypto market as a whole.
By the way, here are some scenarios I illustrated back in February. The yellow scenario has us topping out at the previous broken support on the BLX chart (it looks a bit different from Bitstamp). Interestingly enough, that resistance is ALSO currently around 11.4K. The green scenario has us dropping now to test the rising support (red).
This is not financial advice or a trade setup. This is just what I'm seeing at the moment. Wanted to outline the supports and resistances for future reference.
-Victor Cobra
We also have a mid-term uptrend as support. This rising trendline could help us form an an ascending triangle pattern on the 8200-8400 resistance. Volume is decreasing at the moment, which shows that there is some buyer exhaustion at these levels. This means that in the short term, we may need to test support in the 7500-7600 area again. If that area fails to hold - as mentioned above - we have support at the light blue channel bottom (currently in the 6900 area). If Bitcoin cannot sustain within this bullish channel, the likelihood that we've reached top for now will increase. If volume continues to drop as we move sideways and form a potential ascending triangle, we could actually see a breakout eventually towards 11.4K at least (top of the channel). Volume indicates demand and confidence. Declining volume can indicate exhaustion and uncertainty before an eventual continuation of the trend. OR it can indicate that a trend reversal will soon occur. We won't know until it happens, but it almost always declines during consolidation.
Circled in yellow is a potential fractal, if this breaks to the upside. As you can see, it at first looked like a double top, but instead broke out above. The difference between then and now is not only size, but that Bitcoin made a lower high on the second top this time around.
We're seeing some nice moves from altcoins today. It's especially encouraging to see ETH moving up, since it means that even though Bitcoin has stalled for now, there is plenty of strength in the crypto market as a whole.
By the way, here are some scenarios I illustrated back in February. The yellow scenario has us topping out at the previous broken support on the BLX chart (it looks a bit different from Bitstamp). Interestingly enough, that resistance is ALSO currently around 11.4K. The green scenario has us dropping now to test the rising support (red).
This is not financial advice or a trade setup. This is just what I'm seeing at the moment. Wanted to outline the supports and resistances for future reference.
-Victor Cobra
Catatan
As the daily close nears, bears have generally been in control the last few days. That's something to keep in mind. This tells me that my assumption about buyer exhaustion could be correct. Even when alts rally during the day, the bears execute large sells before the candle has a chance to close green. Seeing this with Bitcoin too.Catatan
I did mention that a dump towards this level seemed likely. So far the triangle support is holding, even though we wicked briefly below it. We have to see if the daily candle can close above. Volume has increased a little again, but this could also increase our chances of blasting through the support. Let's see how bullish Bitcoin really is. Catatan
The altcoin market cap is still above the rising wedge, and holding the resistance as support: Catatan
The above chart tells me that altcoins may actually be coiling for a massive move to the upside. I've been cautious about making this assumption, but so far, things still look fairly good for the market, across the board.Catatan
Yet again, the bears nailed the bearish candle close, right when a bounce seemed like it was happening. Let's see what happens next. Catatan
The next daily candle needs to hold above current levels, in order to confirm a short term bullish scenario. Otherwise, 6900 seems more likely.Catatan
We are also now below the ascending support on the hourly chart: Catatan
Last update for the day: Bitcoin buyers need to overcome the recent sell pressure. A good way to do that would be to get us back above support here and head back up to test 8K levels. Otherwise, as I said, 6900 or even lower becomes a possibility.Catatan
The uptrend has been reclaimed. Increasing volume as well. Very good sign for the bulls if they can hold current levels until the daily candle closes. It’s been the hours leading up to the daily candles closures where bears have been showing the most strength recently.Catatan
Moving along support with decreasing volume. Trying to break out of this triangle. Low volume is fine, as long as it's not a wedge (which it isn't). We're about to enter a long holiday weekend in the US. Will be interesting how that affects the market. Catatan
Broke out of that smaller symmetrical triangle and moving up towards the potential ascending triangle resistance. Catatan
The consolidation has ended! Broke up from the ascending triangle. If it’s going to target my next resistance (11.4K) we’d need to build a flag here and continue up, obviously. Volume has really come in on this move so far, so it seems legitimate.
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