Bitcoin Bottom - Floor has formed & the final touch

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 market.

Finally, if we look at the monthly time frame, we see this:

You may forget 6K for a while & look at the above monthly time frame, which is a cup and handle OR a bull flag. The STOCH(7), my favorite for timely prediction, puts the 7-months averages to oversold conditions giving a false signal that the market is in a permanent bearish conditions. However, BTC has developed a higher low relative to mid 2015 whereas the STOCH itself made a lower low. This is a hidden bullish divergence relative to 7-months statistics. What does this mean? It is a continuation of the primary trend and this can be the very early beginning of the reversal pattern that I kept on mentioning since June. Trouble is that the weekly to monthly ATRs are $800-$4000 which will look wild for short-term traders. So, a $4000 move on monthly time-frame will put this to 11K otherwise 3K. Since STOCH is up, as it stands with hidden divergence, a steady rise has a likelihood as long as the higher low profile is maintained on daily.

UPDATE (Oct 17, 2018)

Here is an updated chart, so far BTC consolidates within a rectangle (5800-6800) has approached the confirmation zone. Now, if this holds, BTC will follow what we had seen earlier i.e. bull market for some months.

Comments

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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 ...

Bitcoin 6K Support - Another Correlation betwen 2014 and 2018

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.

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