BTC full analysis

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On the weekly, we can still see the 7 month Bearish trend is intact. The price broke the base of the symmetrical triangle at the start of June, and has just been rejected off the previous support, now resistance and the 20MA. The 5MA is still below the 20MA with price also below the 20MA. Bullish minor-trends occur in medium term bearish trends. . The RSI can be seen to reflect the recent bounce, however this may be short lived if the price does not break the strong resistance around $7800. The Chaikin Money Flow (CMF) shows that money is still net flowing out of BTC. Volume is declining overall with the price, which is a good sign for bulls - it would be more bearish if it was increasing with the price decline. Keep in mind things always look bearish in a bear trend, until they don’t. A bear trend means shorting resistances and exhaustion areas offers the lowest risk trade. With Price now in-between the 5 and 20 MAs it is a signal we have entered a consolidation area before the trend continues, or reverses.



The 3 day log chart shows some areas of likely support below current price is we do drop further. There is a bullish Order Block from $5450 - 6100 that has been wicked into 3 times already. A fourth test of that level is likely to fail. If it does not hold, there are no real trend The next supports are marked. The trend supports (diagonal purple lines) are from 2015 and 2016 and represent the slow trend for the entire multi-year bullish market that is technically still intact. THe 5 and 20 MAs are about to cross bullish with price above both. This is a major trend reversal signal. If price can stay above the 20 MA, currently at $6800 (a major area of resistance, now support), we could see a continued bullish trend reversal, at least short term. Short term higher lows and higher highs have developed on the chart as well. Strong resistance is still 7500-7800 range and where traders will typically looks to hedge their position to protect against a drop.

A drop below 6k would put all September long futures contracts underwater and create strong selling pressure as those longs are forced to cover.



The daily chart shows bullish momentum on the short term with a 5/20 MA cross while price action is above. Rejection at previous Symmetrical triangle support is/was a great place to hedge a position, if price can break above that level it will be a strong bullish sign. For price to remain bullish it needs to hold above the 20 MA and the previous downtrend Resistance from December 2017. But, Price broke through the downtrend resistance on the log and linear charts on a strong bullish volume. That is a good sign for a possible trend reversal and the MA cross plus price action (HH/HL) support it. OBV and RSI have broken through their Bearish trends from December as well, but as a disclaimer, they have done so each time we had a large dead cat bounce during 2018. After the break from the Symmetrical Triangle, price found strong resistance at the $6800 level which held for nearly a month. The break of that level was violent and supported by volume. A retest of the $6800-7k area is likely. A daily close below $6800 and/or the 20MA is a significant bearish continuation signal. Targets for bullish reversal would be around $8500 and 10k.

All these bullish signals have occurred before in 2018 resulting in a dead cat bounce and drop to new lows. Again, remember - the bearish trend is intact on the weekly. If price drops below the 20MA it is safer to exit and reenter once it is back above.

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A bullish TK cross with price above a green kumo just took place on the 4hr. Historically this has been a strong bullish signal on BTC with a high strike rate. Oscillators are all bullish, but over extended and showing a retrace/consolidation is necessary before continued upward movement. Look for price to stay above the 4hr and/or 6hr kumos to remain bullish. The 5/20 MA has crossed bullish across every time frame, though lower time frames will recross with a drop/retrace, so I am comfortable adding to my long position on dips unless they cross back over on the daily and/or the price closes below the 20ma on the daily (currently around $6700). There is a volume gap (VPVR) between the breakers (green boxes) which will allow price to drop quickly back toward the 7k range if price breaks below $7175.


Summary: Strong bullish signals on the daily through 4hr time frames, but 7 month bearish trend still intact. Follow the short term trend until it ends, and remember hedging with shorts at major resistances is always the safest play until a bullish trend is confirmed on the daily and weekly. Short term, I am comfortable opening long positions on BTC unless the price drops below 6800 or 20 MA on the daily, or the 5/20 MA cross bearish on the daily. A drop below 6k, or $6400 more conservatively would be a strong bearish signal to me and I would close out all remaining long positions in Alts and BTC and wait for a safer entry. If the bullish momentum can be sustained we could see prices reach $8500 and even 10k again within two months. If we are entering a longer term consolidation period (which is common after a large retrace) we may see trend signals cross back and forth for weeks or months before a breakout occurs.