So, contrary to expectations, it appears as though bitcoin has defied my expectations as well as that of most bears (for now).
Let’s check out what’s going on right now.
We’re confronted with another one of those ‘moments of truth’ right now with bitcoin. It could either break this long-term downtrend (the chart above uses log), or it’ll be subject to getting pushed back once again.
On the daily chart, bitcoin would need to break the price of $8,682.51 in order to surpass that long-term downtrend line (spanning from December 17th, 2017).
Now, before continuing forth with this evaluation, it’s important to note the following:
The most important part of this that you need to take note of is that, when the price does break over the trendline, it usually retraces back to re-test it as support before continuing upwards.
So, if the price of bitcoin does break that longterm trendline, this is the likely price movement that we would see:
What if it doesn’t break the long-term downtrend?
Then, more than likely the price would bust back down from one support to the next.
Each of the white lines that you see on the graph above represent different supports that the price would more than likely test before it’s descent downward.
The values for these white lines are as follows: $8.1k, $7.9k, $7.8k.
Beyond that, there are no other reliable supports that can be found until $6,800 — unless we look at MA indicators, Ichimoku clouds, or other indicators of that nature. I won’t spend time plotting those right now because we can cross that bridge when we get to it.
Let’s check out the indicators for BTC to get a better idea of the price direction moving forward. Above is the RSI, Rate of Change for the RSI, Storch RSI, OBV, and Rate of Change for the Stoch RSI (in that order).
As you can see from the RSI and the rate of change for the RSI (4H TF), it appears as though the momentum is still headed upwards for the near future. It should be interesting to see how this price really confronts that $8.6K-ish mark. That will represent a point of very heavy resistance.
The third box in this chart is the Stoch RSI — it’s technically signaling ‘oversold’ — but it’s worth noting that this is a range-bound indicator (the range of numbers is finite. i.e., 0 to 100). If there weren’t this cap on it, then we could probably anticipate that the values would be much higher than what they are now.
Oversold is irrelevant at this point — just momentum.
The rate of change for the Stoch RSI isn’t revealing at this point.
The OBV (on-balance volume) is still bullish.
All of this is stuff is very positive at the moment.
Here’s where some of the TradingView indicator scripts that I use beyond the ‘conventional’ ones have come in handy as well. Lots of good ones that you can find on there:
Above = CM Ultimate MA MTF V2 (Basically a Multi-Time Frame Moving Average that’s set on a 20 period lookback (that’s a lesson for another day).
Basically that green-ish portion of the graph is a bullish signal (as you probably already guessed).
However, this is by no means me saying that the price will break the trend.
I personally believe that the price will get rejected at the downtrend line:
I think it’s possible that a double top pattern could be emerging.
Here was our first warning sign:
So, you’re probably seeing the potential pattern that I’m seeing.
Yup, the double-top.
This is how it would play out:
So, no matter what — one of these two situations would have to play out sooner or later.
It remains to be seen. Remain vigilant. There will be updates coming soon as the price continues to evolve over time.