Cluster of Resistance
At BitOoda we have followed the silver analog to analyze BTC price trajectory in the bear market. On February 11, 2019 we wrote:
“The current market is rather late in the selloff stage. We are more than 80% off the highs. While we are still in the bear market, any price correction can be significant. Our downside target is in the $2400-$2800 range. A short covering rally may easily take BTC to $4030-$4300 cluster of previous highs or even to $5600-$6000 support level that has become resistance. If the market exits a bear stage just a 33% retracement of the selloff would take BTC to $8700. Given how far both the upside and downside targets are one must be nimble and manage their position in a way that insures capital preservation in case one’s view proves erroneous. Being comfortable with a 300-point gap one way or the other has to be part of your game plan.”
The final down leg we were bracing for has not materialized and we are quickly approaching the $6000 level. There is a significant cluster of lows in the low $6000’s between June 2018 and November 2018. This support is likely to provide resistance to the current rally. If it holds, we are likely to retest the lows that were made in December 2018. On a decisive break higher, the foundation of the bear story weakens significantly and mid to high $8000’s become the target for the 33% retracement of the 2018 selloff.
Bears may want initiate short positions at $6000 level with stops at $6400-$6500.
Bulls may want to buy and accumulate on pullbacks if we cross $6100 with stops on breakout failure back to $5700.
“The current market is rather late in the selloff stage. We are more than 80% off the highs. While we are still in the bear market, any price correction can be significant. Our downside target is in the $2400-$2800 range. A short covering rally may easily take BTC to $4030-$4300 cluster of previous highs or even to $5600-$6000 support level that has become resistance. If the market exits a bear stage just a 33% retracement of the selloff would take BTC to $8700. Given how far both the upside and downside targets are one must be nimble and manage their position in a way that insures capital preservation in case one’s view proves erroneous. Being comfortable with a 300-point gap one way or the other has to be part of your game plan.”
The final down leg we were bracing for has not materialized and we are quickly approaching the $6000 level. There is a significant cluster of lows in the low $6000’s between June 2018 and November 2018. This support is likely to provide resistance to the current rally. If it holds, we are likely to retest the lows that were made in December 2018. On a decisive break higher, the foundation of the bear story weakens significantly and mid to high $8000’s become the target for the 33% retracement of the 2018 selloff.
Bears may want initiate short positions at $6000 level with stops at $6400-$6500.
Bulls may want to buy and accumulate on pullbacks if we cross $6100 with stops on breakout failure back to $5700.
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