BTC/USD 1H/1D charts (12/12/2018)
Good morning, traders. Yesterday, we discussed the descending channel and blue wedge that price was printing and, sure enough, the move through their resistance precipitated bullish momentum. Price then found resistance at the descending red line I mentioned as well. The target, based on the width of the wedge, should be $3486, and based on the channel should be $3500. Beyond that, $3995 would be the next viable target based on a larger red descending broadening wedge with the 1H R1 pivot sitting just above it at $4025. Depending on how long it takes price to reach that target, the next larger descending broadening wedge may take price to a $4540 target, which is also the 1H R2 pivot. Finally, that would pull price out of the large brown descending broadening wedge we have been talking about since last week which provides a target of $1050 above the point of breach. I will be taking a closer look at these patterns during this morning's live stream.
A look at the 1H chart shows price continuing to find resistance at the descending red line, but consolidating against it at this time. This current level is a stronger area of support on this TF as the high volume node indicates, which also makes it a stronger area of resistance when price is sitting under it. RSI is currently sitting at 64.5, nearing that oversold level. But there's enough room left in it for a push up toward the lower targets at least before a retrace and potential attempt higher. We can also see increasing volume from the point at which price retested the blue wedge/black descending channel resistance as support.
The 1D shows much the same as yesterday -- price printing an ascending wedge/possible bear flag within a large red descending wedge. Possible double bottom printing as well, if not the left shoulder and head of an IHS. RSI is just now peeking back out of oversold following recent bullish divergence. Logically, since we are bouncing off the ascending channel's support, we would look for price to target the top of the channel. Reaching that point also puts price at the red wedge's resistance. Don't forget that a close above that resistance sets up a target of $1150 above the point at which price breaches it. Additionally, reaching that target confirms the double bottom (if an IHS doesn't play out first) thereby creating a target of $5430. If the IHS prints, then I will update with a target based on that particular pattern as well. We could also see hidden bearish divergence print on MACD's histogram if price doesn't move above the December 4th swing high at $4034. It is currently printing a higher high on that histogram. So, we need to see continued strengthening of price movement upward until that point to avoid that divergence.
Bitfinex BTCUSD longs have continued to rise as shorts are looking at a temporary bottom right now. The 1D volume and price action look very similar to April's low, and I will be discussing that during this morning's live stream as well. If it continues to play out as such, then we should expect a spike in price and volume today or, more likely, tomorrow. But that's a big "if" and highly speculative.
The current swing low is sitting at $3210 on Bitstamp. A close below this level on the 4H or higher TF should signal a move down to $2900/$3000, which was the swing low region of the September 2017 correction. However, beware of a drop below and subsequent close above $3210 on a 4H or higher TF. That would print a bullish SFP that should send price upward, at least in the near-term. Price closing above the swing high of $3633.20 should signal upward momentum, but there has been significant activity in the $3600-$3800 range indicating resistance waiting in that area. So, traders would still need to remain careful. Because of this resistance, we could see a bearish SFP print which should send price downward, at least in the short term. I will be looking for price to target the 4H R1 pivot at $4025 if price closes above that swing high while keeping in mind the resistance as spoken about.
The DXY is bouncing a bit this morning and stocks are looking to have a positive day as the major US indexes are up more than 1 percent in the premarket. Because Bitcoin is a risky asset, the bounce in the broader market should also provide a bounce in cryptocurrencies which would be inline with what I discussed above. However, it remains my believe that any bounce in that broader market is nothing more than a relief bounce and that stocks remain in distribution. That does not mean we can't see a new all time high, but I would rather that we didn't because it would encourage retail traders to FOMO in and the result would be the larger interests selling into them in one large swoop. This is known as a UTAD (upthrust after distribution) in Wyckoff terms. Remember, if DXY continues to strengthen today then that means that the major currencies, in general, should fall against the USD. So keep that in mind if trading FOREX.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
A look at the 1H chart shows price continuing to find resistance at the descending red line, but consolidating against it at this time. This current level is a stronger area of support on this TF as the high volume node indicates, which also makes it a stronger area of resistance when price is sitting under it. RSI is currently sitting at 64.5, nearing that oversold level. But there's enough room left in it for a push up toward the lower targets at least before a retrace and potential attempt higher. We can also see increasing volume from the point at which price retested the blue wedge/black descending channel resistance as support.
The 1D shows much the same as yesterday -- price printing an ascending wedge/possible bear flag within a large red descending wedge. Possible double bottom printing as well, if not the left shoulder and head of an IHS. RSI is just now peeking back out of oversold following recent bullish divergence. Logically, since we are bouncing off the ascending channel's support, we would look for price to target the top of the channel. Reaching that point also puts price at the red wedge's resistance. Don't forget that a close above that resistance sets up a target of $1150 above the point at which price breaches it. Additionally, reaching that target confirms the double bottom (if an IHS doesn't play out first) thereby creating a target of $5430. If the IHS prints, then I will update with a target based on that particular pattern as well. We could also see hidden bearish divergence print on MACD's histogram if price doesn't move above the December 4th swing high at $4034. It is currently printing a higher high on that histogram. So, we need to see continued strengthening of price movement upward until that point to avoid that divergence.
Bitfinex BTCUSD longs have continued to rise as shorts are looking at a temporary bottom right now. The 1D volume and price action look very similar to April's low, and I will be discussing that during this morning's live stream as well. If it continues to play out as such, then we should expect a spike in price and volume today or, more likely, tomorrow. But that's a big "if" and highly speculative.
The current swing low is sitting at $3210 on Bitstamp. A close below this level on the 4H or higher TF should signal a move down to $2900/$3000, which was the swing low region of the September 2017 correction. However, beware of a drop below and subsequent close above $3210 on a 4H or higher TF. That would print a bullish SFP that should send price upward, at least in the near-term. Price closing above the swing high of $3633.20 should signal upward momentum, but there has been significant activity in the $3600-$3800 range indicating resistance waiting in that area. So, traders would still need to remain careful. Because of this resistance, we could see a bearish SFP print which should send price downward, at least in the short term. I will be looking for price to target the 4H R1 pivot at $4025 if price closes above that swing high while keeping in mind the resistance as spoken about.
The DXY is bouncing a bit this morning and stocks are looking to have a positive day as the major US indexes are up more than 1 percent in the premarket. Because Bitcoin is a risky asset, the bounce in the broader market should also provide a bounce in cryptocurrencies which would be inline with what I discussed above. However, it remains my believe that any bounce in that broader market is nothing more than a relief bounce and that stocks remain in distribution. That does not mean we can't see a new all time high, but I would rather that we didn't because it would encourage retail traders to FOMO in and the result would be the larger interests selling into them in one large swoop. This is known as a UTAD (upthrust after distribution) in Wyckoff terms. Remember, if DXY continues to strengthen today then that means that the major currencies, in general, should fall against the USD. So keep that in mind if trading FOREX.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
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