Bitcoin's triangles of demand
Good morning, traders. Bitcoin spent the weekend moving sideways as suggested on Friday and we are nearing a likely large movement one way or the other. The question is, are you ready? Have you prepared for either move? Do you have a plan in place in case price moves against you? And what if it's a shakeout - strong move one way and then the other? These are the possible scenarios that you should be looking at right now. The reality is that two of these three scenarios are bullish - 1) a move up from here or 2) a shakeout (bear trap) that drops price, potentially below the June low, and then returns price to a higher level trapping shorts along the way. I'm not guaranteeing any move up, just reminding traders of the reality of this particular position that price is in at the moment since they have been caught up in the "price HAS to drop below $4800" mantra.
Other than the large triangle patterns that we have been talking about for months now, we can also see that price is printing an ascending triangle on the 1H that began around 9/28 with the upper resistance around $6660/$6670. We can also see bullish divergence on the 4H MACD histogram from 9/29 at 11 p.m. CST noted by having higher lows in the histogram but lower lows in price, as well as the same building on the 4H from 9/19 with resistance around $6800. A breach of the former should set a price target of $6870 and creates a breach of the latter which, then, puts it at $7515. This pulls price out of all the various larger TF triangles creating a target in the mid-9000s and simultaneously confirming the possible complex fulcrum. A move above $8500, of course confirms a bull trend. CMF continues to rise on the higher TFs, nearing a bullish cross of 0 on the 3D. Of greatest interest this morning is the 15 minute candle at 6 a.m. CST. We can see a significant rise in volume but price moved less than $40 and closed just 4$ lower than it opened. This was the largest volume on this TF that we have seen since 9/5 at 7:15 p.m. CST and, with it being such a small TR, indicates demand. The 4H also has its own symmetrical triangle printing within the possible larger ascending triangle which gives us a target of $7000 if it breaks up and $6150/$6200 if it breaks down. The latter would have it testing the diagonal support that began at the 8/13 low. OBV has continued to rise on the 4H even as price has consolidated which suggests that we may see price moving higher. Taking a quick look at the 1D shows price pushing up against the horizontal red line near $6625. This red line is the equilibrium of the 11/6/2017 weekly candle and has provided resistance/support throughout this corrective cycle. A push through that should send price upward as the noted patterns suggest. 1D RSI is bullish at 50 and MACD is nearing a bullish cross over the zero line. OBV shows a steady rise since 8/14 as it nears that ascending support line. Traders can also find a $14 gap on the 1D between 5/10 and 5/11, as well as a $26 gap between 1/15 and 1/16. These are gaps that will most likely be filled at some point. There are no similar price gaps below the current level. Finally, price is sitting on the 4H pivot and just below the 1D pivot.
As a result of all of this, and the things we have been discussing for months now, I believe price bias remains bullish. This doesn't mean traders should just be throwing their money in long, however. They must still develop their trading plans, complete with confirmation levels and appropriate risk management. We never trade on opinions. Trading is borne of speculation, hence it is absolutely a game of risk management. If anyone tells you otherwise, run the other way.
Other than the large triangle patterns that we have been talking about for months now, we can also see that price is printing an ascending triangle on the 1H that began around 9/28 with the upper resistance around $6660/$6670. We can also see bullish divergence on the 4H MACD histogram from 9/29 at 11 p.m. CST noted by having higher lows in the histogram but lower lows in price, as well as the same building on the 4H from 9/19 with resistance around $6800. A breach of the former should set a price target of $6870 and creates a breach of the latter which, then, puts it at $7515. This pulls price out of all the various larger TF triangles creating a target in the mid-9000s and simultaneously confirming the possible complex fulcrum. A move above $8500, of course confirms a bull trend. CMF continues to rise on the higher TFs, nearing a bullish cross of 0 on the 3D. Of greatest interest this morning is the 15 minute candle at 6 a.m. CST. We can see a significant rise in volume but price moved less than $40 and closed just 4$ lower than it opened. This was the largest volume on this TF that we have seen since 9/5 at 7:15 p.m. CST and, with it being such a small TR, indicates demand. The 4H also has its own symmetrical triangle printing within the possible larger ascending triangle which gives us a target of $7000 if it breaks up and $6150/$6200 if it breaks down. The latter would have it testing the diagonal support that began at the 8/13 low. OBV has continued to rise on the 4H even as price has consolidated which suggests that we may see price moving higher. Taking a quick look at the 1D shows price pushing up against the horizontal red line near $6625. This red line is the equilibrium of the 11/6/2017 weekly candle and has provided resistance/support throughout this corrective cycle. A push through that should send price upward as the noted patterns suggest. 1D RSI is bullish at 50 and MACD is nearing a bullish cross over the zero line. OBV shows a steady rise since 8/14 as it nears that ascending support line. Traders can also find a $14 gap on the 1D between 5/10 and 5/11, as well as a $26 gap between 1/15 and 1/16. These are gaps that will most likely be filled at some point. There are no similar price gaps below the current level. Finally, price is sitting on the 4H pivot and just below the 1D pivot.
As a result of all of this, and the things we have been discussing for months now, I believe price bias remains bullish. This doesn't mean traders should just be throwing their money in long, however. They must still develop their trading plans, complete with confirmation levels and appropriate risk management. We never trade on opinions. Trading is borne of speculation, hence it is absolutely a game of risk management. If anyone tells you otherwise, run the other way.
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