Enjoying the speculative aspect of a sci-fi market come to life
This is an idea I would like to build on over time.
It will analyze some potential paths for bitcoin that could be quite likely, given a variety of factors both technical and fundamental.
This will focus less on indicators, and more on simple structure.
I could use your help as well, if you wish to add to the notes.
Firstly, from a monthly perspective this candle is almost certain to close now as a bearish engulfing.
This denotes more downside is to come, at some point during the next month.
We have yet to test the daily 200-ema, however, and I think we will continue to fight for the 30-40k range for some time before capitulating.
The ideal scenario would be to get the bearishness out of the way early next month, sweeping the lows at 30k much like we did the third week of January.
This would set a tone of fear and uncertainty that may keep people out of the market until we've climbed back within range and did some consolidating.
The question is, do we just barely sweep the lows or do we go deep enough to unnerve even the most steadfast bulls - and then find a way back up?
There is also the possibility that the lows aren't swept at all, and we bounce from the bottom of a potential triangle currently around 32.5k.
Watch carefully to how bitcoin reacts when it gets to support. If we have another convincing bottom we will be able to ride the same range up again over the next week and sell at a good profit, anywhere in the upper 30's to very low 40's.
If, however, support doesn't hold this time, look for either a fakeout to around 28k before reversal, or a flash-crash wick to as low as 24k.
No matter how low bitcoin goes in the event of a break of support, as long as it bounces somewhere in the 20's I will look at it as a great buying opportunity.
I try to think like the big players. A lot of people are waiting at 20k, which is all the more reason why I believe a mid-to-low 20's bounce is the right play.
I do not believe the bulls are ready to give up this range, and indeed the coming weeks may provide ample trading or even hodling opportunities.
Once a new low is created below range, there is a good chance that we bounce back quickly. Then we'll have upward consolidation from btc for many weeks, as ethereum turns bullish again before the launch of its hard fork in July.
For all you alt coin hodlers out there that were hit hard by this last market flush out, this may provide you with the opportunity you have been looking for to finally realize your positions in profit.
In this scenario, new all-time highs on a lot of these coins are possible. Perhaps even probable.
A flash-crash first, however, would be confluent on multiple chart levels.
It rockets BTC.D back up to the lower 50s, where it meets heavy resistance and then quickly falls.
It also drops ETH/BTC further back down again - to the top of the Livermore accumulation cylinder - where it then rockets up even further than .08 this time.
The resulting mad dash on the alt market will be (as coined by Thomas Hobbes) "Nasty, brutish and short."
tldr Btc gets held in place of its range while everything else goes on a tear.
This lasts for several weeks until bitcoin finally tries to break resistance in the mid-40s - and fails spectacularly.
After that the right shoulder on the massive weekly head-and-shoulders is finally built and ready for execution.
Everything face-melts downwards again, as btc makes another precipitous drop from over $40,000 to a mere $13,000.
After this occurs we may not see all-time highs on coins for some time so, TAKE YOUR PROFITS and be happy!
Furthermore I am testing end-of-year scenarios for bitcoin wherein it regains some or all of its luster, perhaps even leading to new all-time highs and a 'double-bubble' scenario, or at least a bounce back to 45k.
We all would like to see the yearly candle end on a decent note, in this science fiction market where volatility is king and with the right plays a savvy trader can turn all of their financial dreams into reality.
It will analyze some potential paths for bitcoin that could be quite likely, given a variety of factors both technical and fundamental.
This will focus less on indicators, and more on simple structure.
I could use your help as well, if you wish to add to the notes.
Firstly, from a monthly perspective this candle is almost certain to close now as a bearish engulfing.
This denotes more downside is to come, at some point during the next month.
We have yet to test the daily 200-ema, however, and I think we will continue to fight for the 30-40k range for some time before capitulating.
The ideal scenario would be to get the bearishness out of the way early next month, sweeping the lows at 30k much like we did the third week of January.
This would set a tone of fear and uncertainty that may keep people out of the market until we've climbed back within range and did some consolidating.
The question is, do we just barely sweep the lows or do we go deep enough to unnerve even the most steadfast bulls - and then find a way back up?
There is also the possibility that the lows aren't swept at all, and we bounce from the bottom of a potential triangle currently around 32.5k.
Watch carefully to how bitcoin reacts when it gets to support. If we have another convincing bottom we will be able to ride the same range up again over the next week and sell at a good profit, anywhere in the upper 30's to very low 40's.
If, however, support doesn't hold this time, look for either a fakeout to around 28k before reversal, or a flash-crash wick to as low as 24k.
No matter how low bitcoin goes in the event of a break of support, as long as it bounces somewhere in the 20's I will look at it as a great buying opportunity.
I try to think like the big players. A lot of people are waiting at 20k, which is all the more reason why I believe a mid-to-low 20's bounce is the right play.
I do not believe the bulls are ready to give up this range, and indeed the coming weeks may provide ample trading or even hodling opportunities.
Once a new low is created below range, there is a good chance that we bounce back quickly. Then we'll have upward consolidation from btc for many weeks, as ethereum turns bullish again before the launch of its hard fork in July.
For all you alt coin hodlers out there that were hit hard by this last market flush out, this may provide you with the opportunity you have been looking for to finally realize your positions in profit.
In this scenario, new all-time highs on a lot of these coins are possible. Perhaps even probable.
A flash-crash first, however, would be confluent on multiple chart levels.
It rockets BTC.D back up to the lower 50s, where it meets heavy resistance and then quickly falls.
It also drops ETH/BTC further back down again - to the top of the Livermore accumulation cylinder - where it then rockets up even further than .08 this time.
The resulting mad dash on the alt market will be (as coined by Thomas Hobbes) "Nasty, brutish and short."
tldr Btc gets held in place of its range while everything else goes on a tear.
This lasts for several weeks until bitcoin finally tries to break resistance in the mid-40s - and fails spectacularly.
After that the right shoulder on the massive weekly head-and-shoulders is finally built and ready for execution.
Everything face-melts downwards again, as btc makes another precipitous drop from over $40,000 to a mere $13,000.
After this occurs we may not see all-time highs on coins for some time so, TAKE YOUR PROFITS and be happy!
Furthermore I am testing end-of-year scenarios for bitcoin wherein it regains some or all of its luster, perhaps even leading to new all-time highs and a 'double-bubble' scenario, or at least a bounce back to 45k.
We all would like to see the yearly candle end on a decent note, in this science fiction market where volatility is king and with the right plays a savvy trader can turn all of their financial dreams into reality.
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