BTCUSD Daily on Bitstamp

Trading at 11692USD at press time after peaking out at 13880 yesterday.

In one day we went from 11500 to 13880. A 2380USD rise in 24 hours! 20% rise!!

Nothing can go on like this!

Since the peak at 22:00CET, we retraced 2000USD in 1 hour!

Right now we are at a about a 15% retracement level with a local low of 11200 which almost a 20% drop from high to low.

Search all you like to catalysts, but the one that is most glaring is the one that was right in front of everyone all along.

The 61.8% Fib retracement was at 13373usd. We overshot this with our torrid momentum but it was only a 500usd overshoot, and short live. We only had 3 hourly candles that opened and closed above this level.

So what does TA say about the next moves in Bitcoin?

BTCUSD Daily on Bitstamp

I have said before in previous posts that Bitcoin has a habit of 30-40% retracements during bull markets. Assuming we are in a bull market now, we can look at the 38.2% Fib retracement as a potential support level. It also correlates with a RS line at around the 9600-9800 levels where Bitcoin found resistance back in feb 2018 (off to the left of the chart)

BTCUSD Weekly on Bitstamp

I have also been saying that the 21WEMA is a reliable support indicator during bull markets.

Today this lives at 7100usd and conincides with 2 other indicators, an RS line which was significant support in mid May this year.

And also the 61.8% Fib retracement level again coming into play at 7220usd.

My take

Patience is now required.

Studying lower time frame charts indicates that volume spikes are on the red candles.

We are grinding ever lower with lower lows and lower highs

5min chart

and at the current trajectory we will reach our first RS line (9600usd) in the last days in the next 24-36h. I am not saying that this is what will happen, I am just making a trajectory statement.

We could grind around with uncertain feedback from the market for some time, as we have seen in Bitcoin during the first months of 2019.

So levels to watch for are 9600-9800 and then 7100-7300.

At the first stop I would advise tolerance till we see 2 consecutive daily candles showing strong reversal at the first stop before wading back into the long side. Even at that I would set tight stops.

If we go lower to 7100-7300, then I would again wait for a strong reversal signal and hold tight stops on any long positions.

I have to add here that IF this is our bull markets first retracement, then we should hold 7100 at the very least. A break lower could indicate that this whole rally was a fake breakout and we are yet to find a bottom of the bear market.

Yes seriously! We must at least give some consideration to this possibility.

In a previous post I called the bull market on, but despite the certainty with which I declared this, it is always prudent to look over your shoulder.

As always guys, leave comments, have fun and trade safe.

Disclaimer: This post is not financial advice. Before investing any funds do your own research and make your own decisions. Cryptocurrencies are highly speculative.
And finally: Do not invest money you are not comfortable losing.