After all of the hype over a “bull market” and talk of “bitcoin to tha mewnnnn”, I’ve sat down and started working on some possible scenarios going forward. I’ve mostly used historical support/resistance levels, a few conventional and unconventional trend lines, Fibonacci levels (which I forgot to include in my last post), and of course some guessing. Don’t forget, this isn’t financial advice.
Oh my did he just admit he’s guessing? Yes.
There’s no Elliot Wave or any of that here. This is more simplistic. The movement in between support and resistance levels I don’t care too much about. This is easier for newer traders—who honestly should be playing a long game and not day/swing trading in the short term—to make sense of. Basically it reads like IF THEN ELSE statements:
IF the price finds support at ___ level
THEN the price could meet resistance at ____ level
ELSE the price will rise to test ____ resistance level next.
IF the price fails to break resistance
THEN the price will fall to test support.
These scenarios are based on the likely development of either a large double bottom including the low support level around $6000, and a smaller double bottom including the support level around $9200. The smaller double bottom could possibly be a double top which would shove the price down to the lowest support level. Now this support could completely fail which wouldn’t be fun for any of us, but it’s not likely. It held a fall from near all time highs that we achieved quite fast. It’s likely not going to drop lower off of a fall this small.
We will need a lot of volume at the $9k bottom to push us up through $11.8k. If we drop to $6k, we basically start over and work our way back up. Historically, we get a huge spike of volume at this support level, so it’s likely that we will do so again.
I’ve included some possible dates and an overall time frame (3-4 months which is moderate to conservative) for when we could test some resistance levels, but these could be completely wrong. Like I said, this used no Elliot Waves, and repetitive attempts at testing resistance could be required. I do think we will easily break the $11.8k level this time. This will be the 5th attempt. As long as we have the volume we are good, so that date could be pretty close to correct.
We could be forming either a small or VERY large inverse head and shoulders pattern here.
The reason I don’t think these scenarios will play out is due to the lack of volume during this test of $11.8k. We’ve already failed honestly and a second test in this weak of a market, which I don’t see happening, would likely fail. It could be completely wrong. If you’re not already in the market, I wound wait to see what happens. If you bought in at the lows, I would get out if we cross $10k down. We could be about to test the $10k-11k range or we could be testing $11.2k support to try and hit that strong resistance level at $11.8k. Like I said in my precious post, this was our 4th time trying, and volume was way too low to even make it half way through the zone of resistance between $11.2k and $11.8k. That said, we could break down and bounce off of somewhere in the $10k range with plenty of volume. We will just have to see what happens. Now that the alt market is bleeding, it’s only a matter of time before we see a turn up. Bitcoin will go up first, and as a result of its increased market share, it will pull confidence back into the market and alts up with it. At least it should.
Again, this isn’t financial advise. The purpose of this post and more to come is to help new traders get a basic idea of what’s going on and what could go wrong. It’s best not to listen to the overly bearish or bullish traders out there. Moderatation is key, and try to have fun. We are trying to change the world here and make some money in the process. Don’t stress.
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