Crypto Short

BTC failed to hold above 6K. The lower high series continues, which makes a net channel down. If so, then where is the settlement price? I am looking for: Price adjustment between two successive ATHs i.e. Fibonacci level 0.886. Equal-height method also projects back to the price predicted by #1 Fib level. 2017 highs as future support for mid-term. The chart below annotates, the supports in red while the resistance in blue.

Since June 24 Doji / pinbar (actually on Bitfinex) was perhaps the decisive day followed by the engulfing move. Since then this support zone 6150-5800 remains solid and BTC mostly trades above despite two failed rallies forming a descending triangle. Current low volatility and price settling in a support zone 6150-6800 is an indication that most likely the rally will follow-up to put a Higher High and thus if the momentum fails, bears will have achieved enough momentum to break down the support. Given the momentum (Higher Higher and Higher Lows) continue, the rally will continue and BTC may test 10K, 13 and ultimately 20K in coming months.

Throughout the year, I have been following just one Fibonacci time zone prediction that worked very well. Whenever BTC arrived closer to these zones, something has to happen for some reasons: (a) Previous trend was losing steam (b) Extended cosolidation June 24 was the best example though when BTC closed below support (6K) & recovered in the following day. Thus, the swing zone prediction worked very well and the declining trend put a rally that gave significant profits. The rally failed an till Oct 18, the zone held the support & never closed above 6135 (on GDAX). If you see my previous analysis, whenever BTC lands on the support, I kept on finding evidences of volume/momentum divergences. What do we see now is that BTC holds the support with regular and hidden divergences against the volume and momentum indicators. Recent events, drop on Oct 11 to 6135 & breakout on Oct 15 of 6800 both turned fake. Here is a chart annotating the four fake drops, which held the ...

Klinger Oscillator (KO) is perhaps one of those oscillators in trading that will compensate the price-volume trend. Although there is a PVT (Price-volume Trend) but KO is an add-on feature. For Bitcoin, you can use this as well but for now I am going to put a special case for Q4-2018 here. BTC is at the verge of breaking the bearish descending triangle (Lower Highs and a flat bottom). However, KO tells a different story. In the chart below you find these trends: Jan to Sep a lower high setup - BEARISH Jan to Sep a lower low setup - BEARISH Jan to Jun a higher low setup on KO Indicator, confirming a regular bullish divergence . Jun to mid Aug a hidden bullish divergence, confirming a regular bullish divergence. Failed rally ahead but KO continues the bullish momentum i.e. higher lows while approaching the end of triangle.  What will happen next? It is indicated here in my post (investing.com). Crypto Short: We enter in Q4 with a solid floor defined by descending...

General When it comes to a bubble, the concept of support is not traditional as we understand. To me the support develops in stages. Before you understand the support, recall the following definitions: Support Level: It is a single price level at which level demand is expected. Support zone:  It is a price range that ultimately becomes a demand zone. Stage-I (Near Parabolic Rise): A highly volatile environment, where the price may briefly hit the demand zone. Stage-II (Confirmed Decline): It is a second phase when the price makes lower highs with reducing volatility. Price may still fluctuate at weekly ATR on daily basis.  Stage-III (Reduced Decline Acceleration): Extremely reduced volatility that is often historical. Less trading interest, and very low volumes. This stage usually takes time such as months or years. Despite knowing these things, you may not assume that a Price-X is a support. Usually at Stage-III price may still decline a bit b...

Today, I am going to explain one of the simplest thing in trading that we often forget. The question is why 6K for Bitcoin , why not 7K or 4K or 2K or 1K? You may have your answer but do you have any explanation to that. Perhaps, yes or maybe not. Hang-on, we need something that you can tell from the data without drawing so many lines. Here comes a dirty chart, with messy lines and one simple explanation. Below this chart, I explain two mindsets, first the dirty trader mindset, and second, the simpler investor's thinking. A Trader's Explanation An average crypto trader trades a few bitcoins. He has to draw all small scale features on a chart to trade a trend. For instance on this chart you see a simple Fibonacci fan in a bear market. Each high developed a peak on a fan and followed the fan such that there are lower lows, a bear market. Then the next lower high, which is followed by subsequent lower lows until July 2018. But see what happens next, still a bear market ...

6000 - The Provisional Bottom Bitcoin touched the bottom three times, and on the fourth time, things were different: 1) Price volume were not in sync . 2) Correlation between  2014 and 2018 told where should be the bottom. If 6K bottom is real, all we need is to see: Confirmations Daily to close above 6K on the next fall, which happened on Aug 10, 2018, when the PVT was diverging from the price. (a) Confirmation of a close above 6K (b) Confirmation of Price volume divergence - rally ahead. (see the figure a). Bitcoin to maintain the higher low setup and should stay above the weekly close i.e. 6200. See the image below, which outlines a correlation between 2014-15 and 2018 in search of bottom. Notice that the 2014-15 crash defines a near double bottom event (Weekly Close Line), which was confirmed upon next corrections. It is expected that a re-test of 6200-6600 to occur in coming weeks, and if that level is held, BTC will enter in a bull ...

Many traders will find abundant similarities between two crashes and may say that the history will repeat itself. However, we as a trader mostly overlook things. Here is another important aspect that we have overlooked. Bitcoin first drop during high volatility days defined the support as indicated in red ellipse. This held true in 2014 and was never broken. This also holds true to-date as 6K support was briefly touched but was never broken for weeks. Bitcoin rebounded at least three times from this support and this will be the fourth time if it does again. If this analysis or view is true, then 6K is our final bottom.

This is the fourth time bitcoin is touching the 6K and has developed a near 5800 bottom. The price had a free-fall from 8500. However, when it came down to the 6K support, it behaved like it is close to a gravitational pull. Instead, it slows down. Take a look at the price and volume actions. Especially, the OBV and PVT. Both hold a key when it comes to the reversal pattern recoginition. When every one is bearish, you need to look at some out-of-box tools or utilities that can help you in defining a position. When we touch the support 4th time, it simply means that the support is weak. However, this doesn't mean that a rally cannot begin. Every one expects the bitcoin to reach 2K so that it comes a good buy. Ask yourself, will you buy it? Most probably not. Here is a capture of some key divergences: Regular Bullish Divergence against RSI OBV - Hidden Bullish Divergence Regular Bullish Divergence against PVT With these divergences in-hand one should think about accumul...