Within today’s analysis will focus again on Bitcoin (BTC) after two days. We also took a short break from Bitcoin by analyzing altcoins such as XRP, ZEC a IOTA s BCH. Technically, Bitcoin has not progressed in the last few days – the biggest move took place in the first half of last week and then it’s more sideways.
Update 17:20
So the gold spilled quite decently. Remember how I said Bitcoin was such a capital market canary? Why can’t it be that the canary is gold now? In any case, the dollar strengthened and therefore the yellow metal reacted in this way. So we’ll see if Bitcoin will have a response.
In any case, it is quite certain that a decision will be made this week on an all-time high. The price is only a short distance from subduing the three-year-old maximum, which is quite an unusual event. However, it is necessary to keep in mind that the market is extremely overbought and historically the current situation foreshadowed a severe dump.
When I have to comment on the sentiment in the market, pure greed is ubiquitous – it is unbelievable how uneducable people are to the breed, thanks to which history is constantly repeated. One thing must be noted, and that is that the end of the year is approaching. The current time is the ideal time to correct. In fact, it would make sense to start at the turn of November / December. This was followed by a rapid decline, then two to three weeks of lateral movement, and at the beginning of the year the momentum regained its strength.
Current situation at 1W TF BTC / USD
The last closed weekly candle in the previous six weeks or so visually the most bullish tint. Body large, upper wick small – it’s nice to have a chart. On the left in the graph, look at the last December bullish candle, which is visually completely identical to the current one. You can see for yourself that the candle itself did not indicate that there would be a drop below $ 12,000 in a moment.
Basically a pretty ugly bull trap, because retail usually can’t react to something like that in time. By this I mean that the exact same collapse may occur now. With the difference that there is no reason to calculate with a drop in a sense other than as a simple correction to the counter-trend. According to the Volume profile, liquidity starts at just as much as the 12,000 USD – if I have to say it after a shovel, then the exchange rate has little reason to stop higher when the decline falls.
However, it may happen that the market begins to create equilibrium in higher price relations. But we don’t know until it happens. Therefore, it is probably better to calculate with a decrease to the S / R level, which is at least close to fair value. In addition, the price is quite far from the 20-week moving average – during the previous bull run, the market tended to return to it. In addition, we are at the annual pivot R2, where there is confluence with the upper wall of the drawn broadening wedge.
Indicators
RSI is at 85 points – a value that no one in the world should take lightly. Maybe the market will still have the strength to climb to 90 points, but we must also take into account the three-day and daily TF. As for MACD, we surpassed the numbers from the summer of 2019.
Current situation on 3D TF BTC / USD
For the three-day chart, I want to analyze mainly the indicators – RSI is at 90 points and I must point out that historically it is the most common maximum. During the previous bull run, 90 points meant a deep correction. In 2013, the numbers climbed to almost 100 points, but the conditions on the Bitcoin market at the time were completely different – minimal capitalization, few big players in the market – a single market maker could then do whatever he liked with the market.
The three-day MACD histogram is the highest since 2017. At Stochastic RSI, we’ve been at these 100 points for an incredible month – something similar is seldom seen. In addition, we have technical evidence that the market has changed a lot. The contact of the curves with the vertex before always always meant a drop. Not this time. Finally, notice the slope of the trend diagonal in front of you – a glaring dish.
Current situation at 1D TF BTC / USD
Saturday day candles have a close in the form of a spinning top. However, I marked two more identical candles in the graph. The spinning top is a neutral candle, but at the end of the dish it can easily foreshadow a drop. Note that the first two spinning tops were followed by a slight drop or sideways movement. The Sunday candle is proof that the market reacted negatively to this particular candle this time as well, and so far probably the most.
Indicators
There is little divergence in the daily RSI, but who cares. There were such ones in the chart – in a strong bull trend, it pays to look mainly for bull divergence. Bearish divergences in expansion cycles have a much weaker weight. The same applies, of course, to the bearish trend.
I wouldn’t put my hand in the fire for that, but at first I can see my eyes in the graph reverse Head & Shoulders. If there is a break in the drawn neckline, then I expect stronger selling pressure. This could easily be the first major impulse for a deeper downing of the price. Yeah, otherwise after that breakout from the growing triangle, the expansion failed right away – this is the first time in those weeks.
In return, on the 15-minute chart, my eyes see inverse Head & Shoulers – what paradoxes. If the price breaks, Bitcoin will increase by a few hundred dollars. But will it surpass the 2017 ATH? Who knows. Anyway, according to the Volume profile is POC at $ 17,689 which is close to price support. If the mentioned limit falls, then the market will get an impulse for panic – under that, enough longboats have their stop losses.
Conclusion
So we pumped Bitcoin, pumps and alto. So now all you have to do is flush Bitcoin and find your strengths and weaknesses in the market. One of the weak points is retail, which jumps from the $ 12,000. It’s like a time bomb that causes those suddenly emotional price movements.
This time it will not be different – the correction will take place soon and will appear very quickly. Drop $ 3,000 in one hour? Nothing special in the current environment. And then the panic on social networks in the style: “Should I sell?!?”. Indeed, people are unteachable.
ATTENTION: No data in the article is an investment board. Before you invest, do your own research and analysis, you always trade only at your own risk. The kryptomagazin.cz team strongly recommends individual risk considerations!
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