Bitcoin Update: Watching and Waiting

in #cryptocurrency6 years ago (edited)

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We're still watching that first ascending resistance line to see if bitcoin can decisively break though. A few people have asked if a break through would be a good buy signal. I can't tell you what to do, but personally, I'm not going to play any major position until bitcoin breaks through the SECOND ascending resistance line.

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Zooming in we can see a bear flag has formed. That doesn't mean it'll be validated, but it needs to be acknowledged. If bitcoin has a strong break below, I may enter a quick short position targeting the ascending support (approximately $7,280).

Screen Shot 2018-06-08 at 2.14.19 PM.png

For now, bitcoin is continuing to hover right under this resistance. It's tested it multiple times and failed.

Screen Shot 2018-06-08 at 1.00.49 PM.png

We also should acknowledge what some might call a bearish double top. It looks a little sloppy, as multiple wicks have penetrated. You'd also usually see a more impulsive drop after the second top. Still, it's there and can't be ignored.

Screen Shot 2018-06-08 at 1.12.10 PM.png

I've been covering the 2 possible scenarios bitcoin may be in for a week now. For those who've missed it, below you'll find my bullish and bearish counts. Both are still in play.

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Screen Shot 2018-06-08 at 2.35.20 PM.png

The 4 hour MACD looks fairly neutral.

Screen Shot 2018-06-08 at 1.16.19 PM.png

The 4 hour RSI is still operating within the wedge we discussed yesterday. A break below this wedge would most likely invalidate the bullish count.

Screen Shot 2018-06-08 at 1.18.22 PM.png

The 4 hour Stoch RSI looks like it's want's to rise, but is being met with resistance.

Screen Shot 2018-06-08 at 1.30.53 PM.png

The 1 day Stoch RSI is very overbought. This helps explain the stalled 4 hour RSI. We may see a drop in the short term as the daily stoch needs to correct.

Screen Shot 2018-06-08 at 1.28.46 PM.png

The bollinger bands are narrowing on the 4 hour chart. This often happens just prior to a larger move.

Screen Shot 2018-06-08 at 1.47.14 PM.png

Finally, the 4 hour MACD is still operating within the wedge we've been discussing for over a month now. It's hitting the top of the wedge, looking like it may drop slightly in the short term. As it reaches the apex, watch for a major break in one direction or the other.

Screen Shot 2018-06-08 at 1.14.54 PM.png

If bitcoin drops, there's obvious support at the ascending support line. Below that, we find support at $6,815. If that breaks, the next major area of support would be around $6,450. Should that break, there's strong support at $5,900.

If bitcoin breaks above the first ascending resistance, it'll most likely bounce off the second resistance line. My guess is it'll then consolidate between the first resistance (would then be support) and second resistance line for a day or two.

Let's see how this plays out. As I've been saying, the market is extremely difficult to predict right now. There are very real scenarios that have bitcoin taking off through $10K, or dropping as low as $5K. There will be opportunity to profit in both a bull or bear market. We just need to be patient and wait for more clarity.
In the mean time, if you're not a day/scalp trader, it may be best to sit on the sidelines. Obviously, this is just my opinion. Only you can decide what strategy works best for you, and how much risk you'd like to take. Personally, I'm making small scalp trades here and there, but nothing significant. Sometimes just watching and waiting is the right play.

BIAS:
Short Term: Neutral
Longterm: Very Bullish

I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Thanks for stopping by.

If you found this post informative, please:

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