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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