Grinding the "Magical line"
Diupdate
BITCOIN! First update in quite some time. Usually when I produce and publish an idea on Bitcoin, there's a rather large movement. Will it happen again?
Check out that weekly. Man, that suddenly turned quite ugly.
Bitcoin just closed a daily candle underneath the 7 year "Magical line" for the first/second time since the epic bullrun of 2020:
The recent bounce from this trend line was quite promptly rejected at the weekly 50 and 21 moving averages as well as the daily 200 moving average.
In confluence with those moving averages, there is also a very strong pivot line in the RSI that was rejected at the exact same time. 40 RSI seems to be holding support, meanwhile ~54.34 RSI has possibly now shifted from prior support to resistance. What will win?
Oh, and the MACD fakeout. Will it end up being a double fake and Bitcoin goes back up or was the recent bullish cross rejection a sign of things to come? Let's take a look at various time frames to hopefully figure it out.
Daily picture:
Bitcoin was rejected quite hard off of the 200 daily moving average. The RSI was also rejected at entering overbought. Bitcoin did recently have a golden 50/100 daily moving average cross, but was very short lived due to strong bearish volume. Very recently it dropped below that cross, and it currently *seems* to be providing resistance.
The RSI however is showing a very strong hidden bullish divergence. Within the next weekish or two Bitcoin needs to have a sizable bounce or at least hold above $37,567.19. A close past that and the divergence as well as the higher lows on this time frame will be invalidated.
Notice, though, "The magical line" has only been closed under once (recently) since 2020 or not at all yet depending on how you draw it. The last time "The magical line" was tested was in October of 2020, and it launched Bitcoin into the stratosphere. This time, Bitcoin is sitting $26,000 higher off of a fresh new all time high and just closed below it.
3-day:
GRIND THAT SUPPORT! This time frame above all else is in my opinion most important. The second there is any kind of real bearish volume that pushes price below $39,000, we could see something spectacular.
Monthly:
On this time frame we are seeing multiple concerning signals.
First and foremost, the volume. It dropped lick a rock after January 2021.
Since then, volumes have kept dropping on all exchanges with the exception of Coinbase.
Bitstamp seems to have by far the sharpest decline in volume. (I wonder why...)
Although last month closed green, it closed as a bullish hammer underneath the 9 monthly moving average.
Since Bitcoin dropped and closed below the 9 monthly moving average in December, it has not been able to sustain or close back above it. Currently Bitcoin is about $1,000 away from touching the 21 monthly moving average support.
The 9 and 21 monthly moving averages are converging as well, and with any strong bearish volume there will be a death cross.
The last time Bitcoin was close to a monthly 9 + 21 death cross, it dumped in November of 2018 during the 'hash wars':
Quarterly:
Notice the 9 monthly moving average. I strongly suspect this zone will be tested due to the nature of the most recent candle close. Notice how the candle that produced Bitcoins ATH was sold strongly into by quarter end. Then we have a long legged doji as our most recently closed candle immediately thereafter. When in a downtrend, a long legged doji can be a strong indicator of the beginning of a bullish reversal. While in an uptrend, a long legged doji is very often an indicator of the beginning of a strong bearish reversal, at least temporarily. Interestingly, the 21 monthly moving average is currently sitting just shy of Bitcoins $20,000 ATH.
Another clue here, fibs. If we use a fib retracement for the range Bitcoin has been residing in for a little over the past year, there is something interesting seen.
The 50% retracement held perfectly as resistance. It is almost exactly where the current weekly uptrend met strong selling pressure directly before the quarterly candle close:
TLDR:
Bitcoin just dropped and closed below the strongest support trend line in its existence, but is ranging in a large potential bull flag. Very recently it was rejected from the 50% Fibonacci retracement of the range with confluence of a major RSI pivot and moving averages. Volume has outright died, and its basically a 50/50 on whether that's just typical continuation consolidation or buyers drying up. Monthly and Quarterly time frames are showing at minimum short term bearish signals. The next 2 weeks but especially the next month will be very crucial to determine if the bullish trend continues or if the recent price action was just a dead cat bounce.
Closest strong supports are:
$39,500
$38,875
$37,568
$35,354
$32,014
Major RSI pivots:
54.34
40 (duh)
Make up your own mind, and good luck!
EDIT-
One last thing worth mentioning:
Check out that weekly. Man, that suddenly turned quite ugly.
Bitcoin just closed a daily candle underneath the 7 year "Magical line" for the first/second time since the epic bullrun of 2020:
The recent bounce from this trend line was quite promptly rejected at the weekly 50 and 21 moving averages as well as the daily 200 moving average.
In confluence with those moving averages, there is also a very strong pivot line in the RSI that was rejected at the exact same time. 40 RSI seems to be holding support, meanwhile ~54.34 RSI has possibly now shifted from prior support to resistance. What will win?
Oh, and the MACD fakeout. Will it end up being a double fake and Bitcoin goes back up or was the recent bullish cross rejection a sign of things to come? Let's take a look at various time frames to hopefully figure it out.
Daily picture:
Bitcoin was rejected quite hard off of the 200 daily moving average. The RSI was also rejected at entering overbought. Bitcoin did recently have a golden 50/100 daily moving average cross, but was very short lived due to strong bearish volume. Very recently it dropped below that cross, and it currently *seems* to be providing resistance.
The RSI however is showing a very strong hidden bullish divergence. Within the next weekish or two Bitcoin needs to have a sizable bounce or at least hold above $37,567.19. A close past that and the divergence as well as the higher lows on this time frame will be invalidated.
Notice, though, "The magical line" has only been closed under once (recently) since 2020 or not at all yet depending on how you draw it. The last time "The magical line" was tested was in October of 2020, and it launched Bitcoin into the stratosphere. This time, Bitcoin is sitting $26,000 higher off of a fresh new all time high and just closed below it.
3-day:
GRIND THAT SUPPORT! This time frame above all else is in my opinion most important. The second there is any kind of real bearish volume that pushes price below $39,000, we could see something spectacular.
Monthly:
On this time frame we are seeing multiple concerning signals.
First and foremost, the volume. It dropped lick a rock after January 2021.
Since then, volumes have kept dropping on all exchanges with the exception of Coinbase.
Bitstamp seems to have by far the sharpest decline in volume. (I wonder why...)
Although last month closed green, it closed as a bullish hammer underneath the 9 monthly moving average.
Since Bitcoin dropped and closed below the 9 monthly moving average in December, it has not been able to sustain or close back above it. Currently Bitcoin is about $1,000 away from touching the 21 monthly moving average support.
The 9 and 21 monthly moving averages are converging as well, and with any strong bearish volume there will be a death cross.
The last time Bitcoin was close to a monthly 9 + 21 death cross, it dumped in November of 2018 during the 'hash wars':
Quarterly:
Notice the 9 monthly moving average. I strongly suspect this zone will be tested due to the nature of the most recent candle close. Notice how the candle that produced Bitcoins ATH was sold strongly into by quarter end. Then we have a long legged doji as our most recently closed candle immediately thereafter. When in a downtrend, a long legged doji can be a strong indicator of the beginning of a bullish reversal. While in an uptrend, a long legged doji is very often an indicator of the beginning of a strong bearish reversal, at least temporarily. Interestingly, the 21 monthly moving average is currently sitting just shy of Bitcoins $20,000 ATH.
Another clue here, fibs. If we use a fib retracement for the range Bitcoin has been residing in for a little over the past year, there is something interesting seen.
The 50% retracement held perfectly as resistance. It is almost exactly where the current weekly uptrend met strong selling pressure directly before the quarterly candle close:
TLDR:
Bitcoin just dropped and closed below the strongest support trend line in its existence, but is ranging in a large potential bull flag. Very recently it was rejected from the 50% Fibonacci retracement of the range with confluence of a major RSI pivot and moving averages. Volume has outright died, and its basically a 50/50 on whether that's just typical continuation consolidation or buyers drying up. Monthly and Quarterly time frames are showing at minimum short term bearish signals. The next 2 weeks but especially the next month will be very crucial to determine if the bullish trend continues or if the recent price action was just a dead cat bounce.
Closest strong supports are:
$39,500
$38,875
$37,568
$35,354
$32,014
Major RSI pivots:
54.34
40 (duh)
Make up your own mind, and good luck!
EDIT-
One last thing worth mentioning:
Catatan
:thinking_face:
Catatan
Catatan
Up or down?Here comes some volatilitay
Catatan
:thinking_face:
Catatan
Just a thought here but thought I'd post it anyway.Shallow shoulders?
Catatan
Really wonder here.Monthly looks like crap.
But this ...
And especially this ...
My contrarian senses are tingling hard right now. Hmmm...
Catatan
The low for BTC thus far was $11.47 shy of breaking the 2021 yearly candle open.oof.
Catatan
Although BTC looks like it is potentially forming a nasty bear pennant on the 3 day time frame...
:thinking_face:
:thinking_harder_face:
:thinking_very_hard_face:
:thinking_very_harder_face:
I'm calling it. This is either 'the' macro bottom, (Which I think is essentially 50/50 at this point due to how many people are waiting for ~20k or below) OR this is still a bottom but only temporarily. Either way, the weekly is currently showing a potential tweezer bottom forming, and that 0.618 is a STRONG one. Price has completely and immediately rejected every single attempt at staying below it after the initial wick underneath it. Even the major drop below it instantaneously recovered and closed directly above it, forming a long legged doji. A long legged doji during bearish momentum at a major inflection point is from experience a strong indicator of an early reversal forming. On the daily, price has only managed once to close below it, and not by much. Afterwards, price rallied on well above average volume when compared historically to recent months.
This might just be a DCB in an otherwise lengthy bear market, but there should be a strong bounce here in my opinion.
Catatan
hmmm
Catatan
Hmmm
Catatan
HMMMCatatan
Trend line beginning from the dump at the end of 2018 until now, but on the 2 month time frame:The monthly:
Bi-weekly:
Weekly, 9 red candles in a row, will this be the 10th?:
Daily:
Bruh
Catatan
BUTdat gap?
Catatan
Man...Talk about teetering on the edge
Catatan
Catatan
Another missed opportunity.
sigh.
Catatan
oof. can you say hidden bullish divergence tho? gawt damnCatatan
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