Bitcoin Fake or Real Bullish Wedge, Part 2

9 июл. 2020 г.

My last update from the previous analysis:

It seems as if the stock market saved the day again for Bitcoin. The futures opened higher and kept on pumping since dragging Bitcoin along with it. Both are at resistance zones now, so could just as easily turn around again.

When looking at Bitcoin, it looks more bullish at the moment. As i described above, Bulls need to bounce up from the thick blue line of the chart above, well so far that is what happened. Also looks like a double bottom as well as you can see in the chart here below.

The only task the bulls now have is, keeping it inside that small bull flag zone on the right. Think a max of around 9160/200. If so, good chance we see a break of that 9300/350 zone today or tomorrow.

Also still important to see a touch of that resistance line, which they failed to do a few days ago (as described above) and which is around 9400/450. Then also important to see, if the wedge breaks, to see some volume increase as well. Ideally bulls see it pump to the 9700 zone and then consolidate close to that resistance. If so, good chance we might get bullish movement coming weeks.

First job is still breaking the 9300/350 though, i mean it does look like it will happen, but we have seen so many good looking bull and bear setups fail over and over again (which is somewhat normal in a consolidation). So i would not just sit back and relax.

Just hope we get a breakout this week to either direction, this wedge now says it should happen soon, up or down

So went up more with alts pumping even bigger, things appear to be super bullish. Not each moment, but i still see Bitcoin follow movements of the Dow Jones. Yesterday's low, the Dow was dropping but Bitcoin bulls did hold it though, so could be seen as a sign of strength. But most other moves later on, looked like it was following it's step again.

An update i did yesterday as well:
Seeing alts starting to pump since yesterday as well, which normally is a bullish sign and only sometimes a trap.

But now I start to wonder. The consolidation is very clear to everyone obviously, the 10k-8.5k. We have seen several failures on both sides past month. But this time alts are getting ahead of the bullish breakout? As if it’s telling the whole crypto world, now it’s safe to buy bitcoin, sure thing it will rally. Well of course it could, but I get sceptical things look too easy.

Now a move up to like 9500/800 could, maybe even higher, have no idea tbh. But, I would NOT sit back and relax. Only if you would see a big strong rally within a day or two to like 11k, you could probably be comfortable. But anything less and especially when it looks like short squeeze with low volume, I would be for the lookout for yet another bull trap.

So I am not saying it will happen, just saying be cautious. Also because of what I said yesterday about the nasdaq. I hope crypto will stop following the stock market, but so far no sign at all to think that.


Still think this applies, because when looking at the volume, it's not bad but certainly not convincingly bullish. As we can see on the left, looks like it broke up from that wegde, but no volume to confirm it. This volume could still happen, my guess is, it won't happen until we see 9700/9800 break. This volume MUST happen at some point, ideally for the bulls we see it when 9700/800 breaks and then see a big volume pump to 10.5/11k. That would be the bullish scenario i would guess then.

Short term, on the right we can see it's slightly going up while writing this, moving up from that small flag/wedge. Can also see that rising trend line, which did hold, but there is a danger of a lower high and then see it break. Think it will only happen if we see the stock market drop coming hours, then maybe that blue line could play out. If stocks dont drop, would be ideal to see another jump above 9600 so we can test the 9800/9500 rest of the week.

In case we do see a drop, but remain bullish, think that blue line of the left chart should happen. So no big drop, ideally staying above 9200ish. Below 9200/150, i will prob think the bullish attempt has once again failed.

Something else i updated about in my public channel, is earning season of the stock market:
Also important to know, second quarter earnings season is starting. Since the stock market pumped past 2 month, can assume its mostly based on expectations that everything is still okay. So, if some of the big companies present bad earnings, lower that expected, we could (very likely) see high volatility. I think upside is very limited, because the market has already bet on good earnings. So most likely it can only disappoint I think. That will probably influence the crypto market as well, unless it has detached from the stock market all of sudden. So coming 2/3 weeks will most likely give high volatility

So in short, think blue line on the right could be dangerous. Doesn't mean bull attempt is over, but then has to hold 9200/150. Think ideally for the bulls, we see a push up today, 9550/600, if we THEN see a correction to like 9200/300, think it could still be bullish. So a break up above 9500 would probably be good for the bulls. A lower high coming hours below 9440 could be tricky.

Higher time frame, daily close below 9000 is bad, think for confirmation has to be below 8800ish. Upside think needs a daily close above 9800, think for confirmation just above 10.000.

I know, a lot of variables, i don't like it either, this consolidation sucks but even more, that it follows the stock market so closely makes everything extremely random. It is what it is.



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Previous analysis:

9 июл. 2020 г.

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And there you have it, doing exactly almost as the blue line of the right, only much faster. This is exactly what i mean about how shitty this market is to predict.

Let's be honest, everything looked almost perfect, alts pumping and Bitcoin looked pretty damn stable, This last wedge/flag was also almost perfect. Then why does it fail? Stock market is taking a big drop, Dow is down 500+ points now. Seems crypto market can't ignore that.

Anyway, still above the 9200ish zone. When you look at the daily candle, if that closes below 9150ish, i think yet another (small) bull trap would be confirmed as well)

9 июл. 2020 г.

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Normally past months, during the more bullish moves, after each drop we get those V shape lows, So dropping like 200/400 points but immediately wicking up 100/150 points and then flag. Now, barely a bounce, but this flag is very tiny which isn't normal either.

Alts of course look worse then earlier today, but not really bearish yet. Bears seem to be in favor now, think below 9260/80, bears should stay in control. So if we would see a tiny bounce up but get rejected at 9280 and come back down to 9200, good chance we drop more, something like the red line. If 9280 breaks, it becomes random to slightly in favor of the bulls again.

Daily candle is not very bearish, but think as mentioned earlier, a close below 9100 would make it very bad i think. Also volume on the daily is not high, but could increase if we see another drop before the candle closes in less than 4 hours from now

9 июл. 2020 г.

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What i mean with those V shapes, is this. Several examples from past month, there are more of course than i highlighted with a blue line. The yellow circle looks similar to what we have now

10 июл. 2020 г.

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These lines as i have drawn in the middle, is what this market is about it seems the past 3/4 months. Seen it so many times now, acting as support. Similar line as the big blue line of the primary chart. So as long as those don't break, it shows bulls are in control.

Bitcoin looks like its trying to make an inverse H&S, but ETH is less clear, even has a change to make a bearish H&S. Think for ETH that red zone has to break and for Bitcoin think that red zone should also cause at least a small stop hunt short squeeze. Depending on how big/strong it will be, we can judge if it's a correction up and go down again or that the whole drop was the correction and we have another higher low to continue up.

I would say, stock market has very limited room on the upside, so for Bitcoin to really rally, it has to decouple from the stock market. If that decoupling won't happen, would say the upside for Bitcoin is limited as well and more chances to drop. Must say, Dow bounced very strong again today, but Bitcoin barely followed. WOuld say that is a sign of weakness.

I have also added a channel in the middle, a break of that channel should give an answer of the trend i think. Until then, could also just flip a coin :)