Bitcoin: A Healthy Parabolic Perspective Analysis 1W (Apr. 30)

30 apr 2020

X FORCE GLOBAL ANALYSIS:


The recent bullish move from 3.5k to 9.4k has gotten crypto bulls extremely excited. Based on the recent bullish trend, many traders are coming up with unrealistic targets, without acknowledging the fact that such move is unsustainable. In this analysis, we look at realistic price targets and possible price movements for Bitcoin, based on a parabolic trend line support.

Analysis

- First of all, despite the extremely bullish momentum we have witnessed recently, it's important to note that the movement was not big enough to make a difference in the larger picture.
- We are still trading within a descending parallel pattern, creating lower highs and lower lows
- The current bullish trend is also merely a lower high
- Moreover, Bitcoin has been trading in a triangle for years, creating lower highs and higher lows. This is marked by the green trend lines
- As this triangle has formed after a bullish move, it could be interpreted as a phase of consolidation before another big bullish rally
- The parabolic trend line support demonstrates that we initially create lower lows, until we pass the midpoint of the parabola, in which we start creating higher lows
- Fibonacci levels are also provide us with important information
- We are testing the 0.382 FIbonacci resistance on the weekly, but it seems that a break and close above this level is highly improbable due to strong resistance, including the envelope resistance
- We could expect another possible downside within the triangle, until we see a bullish breakout from the pattern
- Should we break out of the triangle pattern, significant fibonacci levels to keep an eye on are: 0.382, 0.618, and 0.786

Market Sentiment:

Long short ratios are at 67 to 33, with significantly more longs that shorts. Despite the strong resistance, there is still exceeding bullish sentiment in the market.


What We Believe

We believe that the probability of BItcoin having formed a bottom is quite low. Due to strong resistance at current levels, we believe that a potential trend reversal might be in play, and should we see bearish pressure in the market again, it could serve as an opportunity for us to validate the healthy parabolic perspective.

Trade Safe.