Hi friends! Welcome to this update analysis on Bitcoin! Let's jump right in! Looking at the four hour chart, we can see that BTC broke down from the bear flag (in blue,) as prices fell to $7,876. However, shortly after the breakdown from the bear flag, prices reversed back to the upside, and BTC is now testing the bottom of the 50 EMA (in orange.) As I've reported in many of the other cryptocurrencies that I follow, I do see signs of a potential bottom forming in the market. Looking at the MACD, you can see that we still have an enormous bullish divergence (green trendline,) as the broad sell-side momentum has been in a state of continuous deterioration. Looking at the structure on the chart, you can clearly see how we may be forming an inverse head and shoulders pattern. If this pattern completes itself, and we see a breakout above the neckline (black trendline,) I think a test of the top of the downtrend channel would likely be in play. Given the size of the structure, and the depth of the head, that would be a fair target for a rally equal to the full capacity of the pattern. The question is, will BTC pop back above the 50 EMA right now, or do we find resistance and drop lower, to form a deeper right shoulder? Keep in mind, there is a TON of overhead resistance just above the current price action. A breakout above the neckline resistance, would surpass the majority of that resistance, and it could lead to a powerful rally, which corresponds with the bullish divergence seen on the MACD. Looking at the volume, you can see that there are a lot more green bars than red, so the reemergence of the bulls is evident. In summary, I do believe that a bottom could be forming. BTC is currently testing the 50 EMA. We will have to watch how price action behaves here, to monitor the development of this potential inverse head and shoulders pattern. For educational purposes only, a break above the neckline (black trendline) would be a short-term buy signal. Keep in mind, you should never trade a pattern, until the breakout occurs. We've identified that a potential inverse head and shoulders pattern is forming, like the other charts that I follow. Now, we will need to watch carefully, to see how it develops. If this pattern comes to fruition, a powerful rally may ensue.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-MPC loves you-
-JD-
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Keep in mind, the bear flag (in blue) is the pattern that has formed an actual breakdown. That small drop may be all it gives us, or there may be more in the cards, if we fail at the 50 EMA. The inverse head and shoulders pattern is hypothetical, and must now surpass the neckline, to be complete.
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Many people are asking about the rejection at the 50. We appear to be rejecting it, but now I am watching to see if a small inverse head and shoulders pattern develops here, or if we head lower. If you look at the chart, you can see a small left shoulder and head, and we may be forming a right shoulder under the 50. I'll keep you posted as the chart develops.
You should be more humble.... The market always keep the successful traders humble. But you may be a young man still and that is ok. The market will teach you the true value of pretty pictures, lots of lines and what is actionable and what is not. What you are supplying is not actionable analysis.
Additionally You can only afford to be a
"not-so-humble market wizard, droppin' knowledge like bombs in this place!"
if you are an analyst and not a trader sitting at the table with real green at stake.
Anybody with a verified track record of success will be the first to admit that they just dont know, and their success has been careful speculation with more careful risk management, and meticulous scaling in when the tides are with their positions.
@Fefedez, making money in markets dominated by randomness that support any patterns, fib levels etc(you can curve fit anything) should not be treated as fun. Fun is trading tournaments with demo accounts. Would you rather surf a few times a week, sleep a full 8 hours every night, and have a boring profitable trading account,
or would you rather be a viral jack in the box trader on 8 coffee's a day with a crazy trading account of emotional highs and super stressful lows...
I know what I would choose :)
MagicPoopCannon
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@justforex, I’m sorry, who called the top in these markets? Me or you? Who called every move on the way down, like an absolute BEAST!? Me or you? Who’s in who’s comment section? Me or you? Don’t come here, and try to diminish my success! My track record doesn’t lie. Review my charts, and bask in your own amazement!
-Magic-
justforex
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@MagicPoopCannon,
true, you a good analyst. i have said that. big difference between successful trader and good analyst. Greg Michalowski from forex live is possibly one of the best, but in his own admission to me on the phone he said he doesnt trade.
Joel Kruger was not a great anaylist at dailyfx I thought, but he left and has become a great trader with verified results.
See my point... you are an analyst. a very good one. but its too busy for trading, its marketing material though, i give you that! A broker would love your stuff.
CindyDerbyshire
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@MagicPoopCannon, Your Charts have kept me out of Trouble..much appreciated .. Keep up the great Work
@justforex, he is saying the truth: he is not so humble. what's your point? his analysis is actually very balanced.
justforex
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@venturetrade,
My point is essntially; Good Technical analysis is exactly that, perfectly balanced, it uses conditional logic so well that probability is grayed out leaving any beginner trader not knowing what to do, read some of the questions below....
The and - if - then is assembled for both sides of the contract, so the ambiguity leaves one making a shaky decision instead of sticking to ones guns because of good clean analysis with a set risk and trade management plan in place.
How many traders that do well year after year do you know use hectic busy TA to lead them to actionable decisions. I know several successful traders personally and a hedge fund manager who has been doing 60% plus for the last 3 years.
I assure you, the analysis that you are feeding off here is not where money is made, it is where money is lost.
nfs5
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@justforex, I’m sure a lot of people here are curious about your positioning and contingencies in this moment - it’s mostly beginners just looking for a lifeline. There’s just so much noise
Additionally You can only afford to be a
"not-so-humble market wizard, droppin' knowledge like bombs in this place!"
if you are an analyst and not a trader sitting at the table with real green at stake.
Anybody with a verified track record of success will be the first to admit that they just dont know, and their success has been careful speculation with more careful risk management, and meticulous scaling in when the tides are with their positions.