BitCoin: Reistance-Support (R-S) Junction

The R-S Junction

Bitcoin has seen several lower highs and lower lows during the continuation of the current bearish market since Dec 17. Future prediction is a pain in crypto market. However, we have seen some cases in past, which may assist in predicting the future of BTC. Here is another way to look at between ATH and ATL since Dec 17 and forecast the future.

I define the R-S junction as a point where the resistance and support meet together and a new deflection in trend happens.

Historical anchor points:

S1a - First major support level @5422
S1b - Second support level @9202

R1a - ATH1; First major resistance level @19888
R1a - ATH2; Second major resistance level @17285

The junction that has been seen between Feb 21-22 clearly shows a trend reversal to bearish market. Should the market set another long-term Bearish Trend, we need to see MA/EMA cross-over. The cross-over of Feb 21 clearly indicates a trend reversal and the establishment of a bullish cycle. Thus, two different stories.

Bearish or Bullish Retracement Problem

The arising question is

Are we just overlooking a long-term pullback from ATH 19k to 6k?

BTC is just dropping from its ATH. However, the swing happened this month on Feb 6, 2018. Should this swing continue the all time set trend i.e. bullish market, we need to look at long term parameters. Perhaps, the best we could do at this moment is to look at 4H charts and ignore 1D or 1W charts since they just show less amount of technical parameters to see the future.

To answer the above question, we need to know if the short-term (2months) bear market is ending, which is explained below.

Is Bearish Cycle Ending?

This is a supporting chart to illustrate a case that the bearish market is perhaps at the verge of its end. The MACD and Stoch-RSI are adjusted for a long-term position and entry point for the bull market. This chart clearly shows a cross over and a beginning of a new trend since Feb 03, 2018.

Conclusion

To sum-up, an R-S junction only defines a deflection point. At that point we may see a swing in price either up/down but that remains short-term vision since it is based on near past ATH or ATL. This observation must be backed up with SMA or Stoch-RSI as per trading period that you are looking for. The present case of BTC is all set to define a new consolidation phase with low trading margin and perhaps a termination of the on-going Bearish Trend.

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