SPOTTING THE NEXT BTC ENTRY POINT - Snap Crypto Update - Are cryptos breaking out?
Thursday 26/07/2018, 13:45CET
Over the last 10 day I've been away on vacations and stayed off line as much as possible, but even so, I was not sufficiently cut off to have not been made aware of the latest breakout in BTC and to a certain extent the wider crypto markets. See my last 2 posts for more context here and here
So time to dive in and see what our technical analysis says about the latest price moves and a potential entry point now that it is being seen more and more that 6k is now our strong price floor in #BTC?
Let's look at the latest daily charts with some simple analysis overlaid...
btcusd 1d -[bitfinex]
If you are in the btc markets already, this image must look beautiful to you.
We have seen a bounce of our 6k mark and this time the breakout has a very healthy look to it.
Anyone who bought at the 6k levels is sitting on almost a 40% profit. So do not be surprised if these speculators are profit taking right now, and we can see this in the charts.
We powered through the 7800 rs line with only the lightests of resistance which is better visible in the hourly chart.
We are forming a nice ascending channel here with a high confirmation to its centerline as you can see here.
I think the chart gives us a lot of information if we look at this channel together with the known rs lines and the moving averages. Often this all you need to get a quite good feeling for what is coming next in the chart.
We almost challenged the 200 dma after crossing the 100, 50 and 21dma with hardly breaking into a sweat!
We have stretched a fair way above our 21dma which is our key momentum indicator which indicates a overbought environment. Not a good time to buy.
In fact to me this chart is screaming WAIT before buying in.
Profit taking has started for those that bought in at the 6k levels as I mentioned before. The chart makes no bones about this. It is very clearly visible here.
The RSI is also indicating that professionals will sell rather than buy at these levels with this chart setup. Bots will most definitely read it this way as well.
Probable moves from here...
I am looking at btc to retrace back to the 100dma over the next few days, maybe over the weekend, which nicely lines up with the centerline of our channel.
I will be looking for a bounce here to confirm and measure the bull power of this breakout.
This outcome would be a strong buy signal at the 7700 to 8000 levels. Yes I expect a retracement back to these levels in the next days.
Looking at the bearish side, if this level is broken through, then either a bounce off the 21dma at the 7500 level and worst is the support at the rs line at 7050. That is the bottom of our channel. Always challenge your bullish bias and analyse the worst cases, and most important plan your trade for it.
So for the bull outlook, there is a small chance that we go raging bull again right from here, which will see us rise and hit resistance next at 8970 USD. To be honest, I think the odds of this happening without a retest of support lowerer down somewhere is low.
Let me know in the comments if you agree, or if you don't then what you see as the likely next moves.
p.s. Bonus material
Alt coins? What do I think is happening?
Well just as a quick glimpse here is the coinmarketcap btc dominance chart over the last 12 mths with just BTC and Others highlighted...
We see here that when BTC dominance is on the assent, the alts typically show a negative correlation.
In the short term, what I am looking for is to see some of my favourite alts to show a breakout pattern vs bitcoin and see if there is a trade to be made to catch some altcoin fun in the next week or so.