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Bitcoin: A Long-term Channel & Consolidation Phase


BTC Returns to its Mean Trend

Bitcoin has entered into a stage where it has to decide its direction. The above figure contains several technical parameters. However, the important notes are:
  • MA/EMA(30,10) cross-over highlighted in my previous posts has been confirmed.
  • Major chop zone ends although small price retracement or pullbacks are going to be common.
  • RSI(14) is neutral.
  • MACD remains neutral as well with no obvious signal at this point.
  • BTC returned to its mean i.e. MA150 (see MAC of 100, 200 days) suggesting a pure consolidation phase.
On 4H or 1H charts, the development of cup and handle took 9-days with a trading range from 9200 - 11000 forming solid support and resistance levels.



The mean trend of BTC has been recovered since passing the R-S junction (see my earlier post). Now the consolidation phase starts and trading here would be +/-10%. It is very likely that one may see another low or bottom, which will be an opportunity to go long again. Shorting now would be tricky and may result in 5-8% with confidence over days.

Here is a final image with MAC and cross-overs, don't get overwhelmed with this cross-over and open a long unnecessarily. You may get a better price in near future when the price dips down to test lower support i.e. 9318/9200 (see 1D Chart), which is very strong.


Trading Plan

To trade during this MAC or consolidation phase, one has to recognize the key support and resistance level. A better technical way to do this is to draw two Fib trends both at 1:1 scale. They should be positioned with respect to solid support and resistance levels known from past months. You may replicate my following chart and see if you can find the key levels to enter/exit.

At present we are within 0.236 Fib level not far from a strong support at 9318 and a strong resistance at 11825.



Verdict

Trading range thus will be around 0.236 Fib for coming days unless the major support or resistance is breached. Thus, the range is 9300 - 11200 with a tight stop loss of +/-3% around these numbers.



Crypto Short




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