BITCOIN: Moving On Up, But How Much and For How Long?
Good morning, T-Viewers! I wanted to post a BUY declaration a few days back, when the RSI closed at 30.1285 on 2018-05-28, but I was still working on a new low-to-low trendline channel. Now that I've settled on a new channel, it's time to look at what's been an expected recovery for Bitcoin. Is this merely regression, or will the bulls start to charge soon?
If you recall back to my first nine ideas, I used a pink low-to-low regression trendline channel that connected the lows from 2017-09-15 and 2018-02-06. This channel was designed to project the Bitcoin bottom in early April, and it worked to near perfection. My first BTC post on Trading View declared that it was testing the bottom, and we still have yet to drop below the $6795.18 price held at the time of publish. It was certainly a great call made at an opportune time, when most T-Viewers were focused solely on bearish action.
However, the best technical analysis feature adjusted trendline channels, as each day provides more data for the daily charts. I failed to make those adjustments. I should've projected MULTIPLE possible outcomes for Bitcoin's Memorial Day Weekend bottom, with one using the OG channel and one using a new channel that included data from the April bull run and the May bear run. Because of this failure, the TA result was a broken trendline channel with no follow-up idea.
Personally, I believe that 2018-05-28 is the low of this bear run, as the RSI became oh-so-close to reach 30. However, I didn't have a supporting trendline channel secured in mind until today. I was going through four ideas: (1) connect the lows of 2017-09-15 and 2018-04-01, (2) connect the lows of 2017-11-12 and 2018-04-01, (3) connect the closing prices of 2017-09-14 and 2018-04-06, and (4) connect the close-based five-day volume-weighted moving averages (VWMA) of 2017-09-17 and 2018-04-09. Eventually, I arrived to the last choice, and I'll explain why.
Using the VWMA(5,close) to find bearish lows gives us enough data to settle on a more normalized low point, considering the cryptocurrency price volatility. In contrast, using momentary lows can be misleading, as we cannot tell the difference between a volatile low (like $5873.00 on 2018-02-06) and a stable low (like $6518.88 on 2018-04-06). Meanwhile, using the closing price can be arbitrary, as markets never close in Cryptoland and no closing price swings happen as a result.
The five-day volume-weighted moving average is the most viable option to gauge the highs and lows of a cryptocurrency as it goes through bullish and bearish waves. Therefore, I drew a new trendline channel, shown in purple. As with the previous one, this channel includes the central trendline that connects the lows, followed by the 6.4% upper and lower bounds. This channel connects the VWMA-based lows of 2017-09-17 ($3631.52) and 2018-04-09 ($6796.27), which creates a daily slope of approximately $15.51 on the central trendline. Note that the previous trendline's daily slope was approximately $20.15, so Bitcoin is not climbing as rapidly as once thought.
Albeit coincidental, this new trendline almost perfectly projected the low for this recent bear run. [Also of note, the channel was briefly touched on 2018-02-06 and thoroughly tested in early April.] We've seen roughly a 10 percent recovery since, which makes it likely that 7K remains the low. However, this recovery may simply be regression, given the uninspiring 18.039K trading volume over the last three days. We need to see the bulls come to play to prove that it's more than regression, and I don't think that will happen until Bitcoin leaves this trendline channel. The upper bound price is $8221.61 for 2018-06-04 (tomorrow), so that's the target price for now. If it reaches that point, I'll assess our potential buying options.
Until then, my best to you, as we trade!
If you recall back to my first nine ideas, I used a pink low-to-low regression trendline channel that connected the lows from 2017-09-15 and 2018-02-06. This channel was designed to project the Bitcoin bottom in early April, and it worked to near perfection. My first BTC post on Trading View declared that it was testing the bottom, and we still have yet to drop below the $6795.18 price held at the time of publish. It was certainly a great call made at an opportune time, when most T-Viewers were focused solely on bearish action.
However, the best technical analysis feature adjusted trendline channels, as each day provides more data for the daily charts. I failed to make those adjustments. I should've projected MULTIPLE possible outcomes for Bitcoin's Memorial Day Weekend bottom, with one using the OG channel and one using a new channel that included data from the April bull run and the May bear run. Because of this failure, the TA result was a broken trendline channel with no follow-up idea.
Personally, I believe that 2018-05-28 is the low of this bear run, as the RSI became oh-so-close to reach 30. However, I didn't have a supporting trendline channel secured in mind until today. I was going through four ideas: (1) connect the lows of 2017-09-15 and 2018-04-01, (2) connect the lows of 2017-11-12 and 2018-04-01, (3) connect the closing prices of 2017-09-14 and 2018-04-06, and (4) connect the close-based five-day volume-weighted moving averages (VWMA) of 2017-09-17 and 2018-04-09. Eventually, I arrived to the last choice, and I'll explain why.
Using the VWMA(5,close) to find bearish lows gives us enough data to settle on a more normalized low point, considering the cryptocurrency price volatility. In contrast, using momentary lows can be misleading, as we cannot tell the difference between a volatile low (like $5873.00 on 2018-02-06) and a stable low (like $6518.88 on 2018-04-06). Meanwhile, using the closing price can be arbitrary, as markets never close in Cryptoland and no closing price swings happen as a result.
The five-day volume-weighted moving average is the most viable option to gauge the highs and lows of a cryptocurrency as it goes through bullish and bearish waves. Therefore, I drew a new trendline channel, shown in purple. As with the previous one, this channel includes the central trendline that connects the lows, followed by the 6.4% upper and lower bounds. This channel connects the VWMA-based lows of 2017-09-17 ($3631.52) and 2018-04-09 ($6796.27), which creates a daily slope of approximately $15.51 on the central trendline. Note that the previous trendline's daily slope was approximately $20.15, so Bitcoin is not climbing as rapidly as once thought.
Albeit coincidental, this new trendline almost perfectly projected the low for this recent bear run. [Also of note, the channel was briefly touched on 2018-02-06 and thoroughly tested in early April.] We've seen roughly a 10 percent recovery since, which makes it likely that 7K remains the low. However, this recovery may simply be regression, given the uninspiring 18.039K trading volume over the last three days. We need to see the bulls come to play to prove that it's more than regression, and I don't think that will happen until Bitcoin leaves this trendline channel. The upper bound price is $8221.61 for 2018-06-04 (tomorrow), so that's the target price for now. If it reaches that point, I'll assess our potential buying options.
Until then, my best to you, as we trade!
Nota
6/9/2018, 2:05pm ESTIt's been almost a week, and there's not much to update about where Bitcoin is trending. Basically, the crypto market is moving sideways so far in June, similarly to how it began April. The only difference is that the April sideways trend featured a failed breakout, while the June sideways trend has yet to even see an attempted bull run to break through the lower trendline channel.
As a squeezing pattern emerges, I'll attempt to gauge where Bitcoin is headed. Therefore, I added a new trendline to photo below. The blue trendline ($14.51 daily slope) connects the VWMA lows of 2017-09-17 and 2018-05-30, so it acts as an updated version of the purple trendline. Note that I've yet to create a blue trendline channel, because I only intend to focus on the range between the purple and blue trendlines. That's where a heavy majority of the price action has been resting since June 4th. The gap between the two trendlines getting oh-so-slightly wider as the days go on (approx. $1 per day), but it's nothing that'll contain Bitcoin's price action for long.
Overall, I still lean towards the bulls for this month. Institutional investments are still entering the crypto market, and the selling volume has clearly subsided. Also, given how uncharacteristic the sideways movement is in the crypto market, I suspect many day-traders are getting restless. Sooner than later, a notable burst of price movement will have to happen. It's only the gut feeling pointing up right now, but there'll be technical indicators to help us out soon.
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Nota
2018-06-09, 9:02pm ESTWell, just as expected, it looks like restlessness led to notable price action for Bitcoin. However, this isn't the good kind of action.
Bitcoin just closed at the blue trendline after taking a late tumble. That decline continued over the next hour, and now the lower bound of the purple trendline channel is being tested.
This is a VERY IMPORTANT TEST for Bitcoin. If it can hold and bounce back, it'll further confirm that the periodic lows continue to have a higher value, which is a certain positive for the long-term picture. However, if it breaks the trendline channel, we may have to start looking at past lows.
Let's see how this movement plays out before I give more analysis.
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Nota
2018-06-10, 10:00am ESTNote that Bitcoin dropped as low as $7187.01 overnight, and that the lower bound for the purple trendline channel for today is $7261.59, meaning that the closing price and ensuing price movement could break the trendline channel. Also note if we were to create a blue trendline channel, the lower bound would be $7011.41 for today. This price is lower than the 2018-05-29 low ($7058.00).
The worst case scenario would be that Bitcoin falls below 7K. That would certainly send me back to the drawing board.
Nota
2018-06-10, 1:37pm ESTApproaching worst-case scenario...
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Nota
2018-06-10, 1:40pm EST...and now we're below 7K. This is the first time Bitcoin is at sub-7K since April 12th. It might be time reassess matters. Maybe this drop is related to U.S. exchange subpoenas and Korean exchange hacks. Maybe it's worse. Either way, my trendline channels are failing. And the price continues to tumble as I type this...
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Nota
2018-06-10, 2:10pm ESTThe drop continues into the 6.7K range. Now we need to see if it holds, and of course, for how long it holds. If this is momentary, and Bitcoin recovers within the next few hours, I think it's best to keep one of the two trendlines I have in play. If this is sustained, then we'll have to see what the five-day VWMA says.
In the picture below, the five-day VWMA is hanging around 7.3K, which would replace the May 30th total ($7331.23). To help keep track of it, I've added the five-day VWMA to the chart, as shown in gray. (Honestly, I should've included this indicator earlier, but somehow my mind never thought of it.)
The picture looks bleak, for now. Let's await the inevitable recovery and see if it helps at all.
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Nota
2018-06-10, 2:15pm ESTHere's a better view of the five-day VWMA. I've bumped it to the top and made the line thicker. See how it's testing the lower bound of the purple trendline channel? The recovery here is PARAMOUNT over the next few hours, and then the next few days. Where this trendline will TRULY FAIL is if the VWMA closes below the trendline channel. That's when I'll need to go back to the drawing board.
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Nota
2018-06-10, 6:40pm ESTLet's talk the lower bound for the blue trendline channel, as nothing short of major surge will keep the VWMA(5,close) inside the purple trendline channel.
Here's the lower bounds for active five-day period in wait:
> $7011.41 for 2018-06-10
> $7024.99 for 2018-06-11
> $7038.57 for 2018-06-12
> $7052.15 for 2018-06-13
> $7065.73 for 2018-06-14
This is a very shaky possibility in itself, right now. At $6725 (re: the current BTC price as I type this), the other four days will need to average at least a $7100 close. If there's another day that closes around this price, the other three days will need to average at least a $7250 close.
That'll conclude this idea for now. I want to see how these next five days play out. Unless something major happens before then, I'll be in the lab.
This purple trendline seemed to be good for only one bounce back.
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Declinazione di responsabilità
Le informazioni ed i contenuti pubblicati non costituiscono in alcun modo una sollecitazione ad investire o ad operare nei mercati finanziari. Non sono inoltre fornite o supportate da TradingView. Maggiori dettagli nelle Condizioni d'uso.