Bitcoin Daily Update (day 191)

6 set 2018

I believe that it is possible to beat the market through a consistent and unemotional approach. This is primarily achieved through preparing instead of reacting. Click here to learn more about how I use the indicators below and Click here to get my complete trading strategy! Please be advised that I swing trade and will often hold onto a position for > 1 month. What you do with your $ is your business, what I do with my $ is my business.

I did another in depth bubble comparison yesterday and have amended my short term projections. Click here to read that analysis. 1 day - 28 days = < $5,750 | bottom prediction: $2,860 by 10/30

Previous analysis / position: “$6,789 and $6,343 are my key areas of support...If you are not in position then now is not the time to chase! Wait for a bounce and then be ready to short...If you did enter in the last few days then now is the time to adjust stop losses to breakeven.” / Closed ETH:BTC short at +77% with intention to re enter if we bounce. Still short ETH:USD. Took profit on 33% of position improving my average cost basis to $317.37 per ETH.
Patterns: Weekly tweezer top. Descending triangle.
Horizontal support and resistance: R: $6,476 - $6,500 | S: $6,268 - $6,347
BTCUSDSHORTS: Approaching all time high levels.
Funding Rates: Shorts pay longs 0.0815%
12 & 26 EMA’s (calculate % difference): 12 = -6.79% | 26 = -6.14% | Very surprised that they have yet to make a bearish crossover.
50 & 128 MA’s: 50 = -8.53% | 128 = -11.05%
Volume: Big volume spike yesterday provided confirmation that the sell off was not a trap. Very surprised by the volume today. Currently 2X average and still more than 6 hours left!
FIB’s: 0.886 at $6,262 predicted current bounce.
Candlestick analysis: Bearish engulfing weekly candle has started every sell off in this bear market. Provides great confirmation for the bears. Weekly tweezers have also been very reliable/powerful.
Ichimoku Cloud: “Best entries occur when everything flips at once” Looks like this is getting ready to happen on 4h. Incoming TK’s cross + likely bearish kumo flip + just started trading below the cloud.
TD’ Sequential: 4h chart is currently on a green 1 that was a red 9. Interested to see if we bounce. Daily provided entry with R2 < R1.
Visible Range: Short term gap from $6,480 - $6,880 has been filled. A bounce back to $6,880 to test for resistance seems likely.
BTC’ Price Spreadsheet: 12h = +0.31% | 24h = -7.97% | 1w = -7.89% | 2w = -3.90% | 1m = -1.36%
Bollinger Bands: Almost touched bottom band on yesterday’s selloff. Expect MA at $6,787 to become strong resistance.
Trendline: Connect July 26th to September 4th.
Daily Trend: Bearish
Fractals: Down at $6,231 represents key area of support.
On Balance Volume: Moving down w price
ADX: -DI crossed above +DI as expected and they are quickly diverging. ADX crossing 20 indicates that the range should be over and we should be ready to trend again.
Chaikin Money Flow: Moving down with price.
RSI (30 setting): W = 48.69 | D = 45.02 | Pulling back below 50 provides further confirmation for bears. Expecting a return to 30 before thisj bear market is over.
Stoch: Pulling back sharply on daily. Made a bearish crossover on 3d.

Summary: There is plenty of confirmation that indicates yesterday’s selloff was only the start. Specifically I am referring to the: Bollinger Bands, RSI, ADX, VRVP, weekly bearish engulfing / tweezer top.

The only two factors pointing to the contrary are: btcusdshorts nearing ATH’ and the funding rates being very expensive for short sellers. This tells me that we could see a sharp spike to $6,800 - $7,00 before continuing the sell off. If this happens it will provide a tremendous selling opportunity.

If you are not in a position then be prepared for that outcome. If you are in a position then taking some off the table with the intention to re open if we bounce makes a lot of sense to me.

There is also the possibility that short sellers blow through the all time high levels and go on a bit of a parabolic run themselves. This seems more likely than usual due to how fast they have risen over the last few days. That tells me the positions are being held by a small number of traders. I get concerned when everyone and their UBER driver’s are opening short positions and that doesn’t appear to be the case this time around.