Bitcoin Price Analysis 6–3–2018

Picture Credit: Btcmanager

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Did a price analysis on Bitcoin on June 3rd, 2018, and wanted to push that out for archival reasons and also so that people can scroll back in the future and see the updates that I have made on Bitcoin.

Disclaimer: This is not financial/investment advice of any sort, this is merely just information for you to use.

Please note that this analysis was originally curated June 3rd, 2018, so this is the full, non-redacted version. Any charts+statements in the present tense were made at that point in time.

Bitcoin Price Analysis 6–3–2018

Introduction

Okay, so Bitcoin broke out of the short-term downtrend it was in on the 1D chart.

Pardon the messy chart, got like a million overlays on it right now.

When I saw this happen, that’s when I started feeling that it would be a relatively safe point to invest (remember I mentioned the price potentially breaking the upside of $7.7k being that ‘safety point’)

I said I wanted to wait until $BTC broke the upside of $7.7k because I saw the price getting rejected constantly by that short-term downtrend from May 5th

Understanding Trend Lines

So, that golden arrow at the bottom shows the potential price action that I thought we may get stuck with. The gold boxes show how the price had nudged against this line before and got rejected before continuing the decline downward.

So, now that it’s broken on that upside on the daily, I can feel a little more secure that there may not be a violent whipsaw to Bart us downward.

Support and Resistance

All the lines you see on the chart above are resistance/support points that I’ve plotted over the course of time.

I determine these points by watching the price of Bitcoin. If I notice that it takes forever for the price to move below or above a certain threshold (i.e., if the price is stuck at like $8.1k-8.2k for like 3 days in a row), then I draw a line there and I deem that a support resistance.

This has been a REALLY valuable strategy for me because these points have really held true and whenever the price re-tests the line that I drew at a later time, I notice that it still acts as a support/resistance. So, it allows me to better anticipate pivots.

I’m sure most of you know this but, every line can be a support OR a resistance.

If the price is above, it becomes a support (meaning that there’s a wave of buying power that will hinder price movement downward).

If the price is below the line, then it is resistance (meaning that there is a wave of sellers at that price that will hinder price movement upward).

Here’s an article I wrote about this topic:

View story at Medium.com

So, based on my chart $7.5k is looking like support at this point for Bitcoin

That’s important for me personally, because there are times where the price of Bitcoin will randomly surge upward or downward without warning (whipsaws). But, knowing that the $7.5k will serve as a strong support most likely gives me more confidence as well, because I feel that the $7.5k will act as the ‘stop’ for price movement downward.

So, we won’t get caught w our pants down (hopefully)

The more times a trendline or support/resistance point is tested, the more ‘reliable’ it becomes.

Looks to me like $8.1k is the next point of resistance. I anticipate price action continuing to that point. Perhaps there may be a intermediate re-test of $7.5k before getting there though.

But I don’t think ‘panic’ or scrambling into short positions is warranted unless it sinks below $7.5k and holds that point for a decent amount of time (few hours at least).

Let me get to a cleaner chart and start looking at what some of the overlays are telling me.

Chart Overlays

CM Guppy

CM Super Guppy (1D TF) $BTC

MACD

MACD (1D TF) <- Not an overlay, but I moved it on the chart for a better visual $BTC

Momentum/Trend Indicators

Relative Strength Index (RSI)

RSI (1D TF) $BTC

Rate of Change of the Relative Strength Index

Rate of Change of the RSI going through the roof (1D TF) $BTC

Stochastic Relative Strength Index (Stoch. RSI)

Stoch RSI (1D TF) $BTC

Choppiness Indicator (Smoothed Over With the Hulls Moving Average [HMA](9))

Choppiness Indicator (1D TF) $BTC

So, we’ve established that Bitcoin is looking mad bullish on the 1D TF. I’ve been using this TF because trends that emerge on the 1D are a lot more predictive of future price action than what you see on the lower TF (like the 4H for example).

Now, let me get to the part on why I felt a long on BCH was better than a long on $BTC.

Disclaimer: None of this is financial advice. Just outlining my personal thoughts & my personal strategy for selection. I’m not saying you should go long/short/divest of anything. Everything is your choice. I’m posting this under the assumption that you consider this to be a platform for sharing ideas rather than advice on what course of action you should take.

I’m Going to Go Back to My Messy Chart for a Second

Explaining Why $8.1k is a VERY Strong Resistance Point

Remember when I mentioned the $8.1k as a point of resistance? There are a lot of converging indicators that corroborate this assumption.

Ichimoku

Ichimoku agrees that the price resistance = $8.1k as well.

I didn’t mention this in the chart itself, but I imagine that the conversion line (that red line that you see in the cloud) will more than likely come down to $8.1k if or when Bitcoin hits that $8.1k.

Folks don’t mention this often but the conversion line (blue line on my chart) and the base line (red line on my chart) for the Ichimoku can both serve as support and resistance points because they are MA (math formula not as straightforward as ‘typical’ MA indicators).

This means that when the price falls below either of these lines, that’s a sell signal <- This stands particularly true for the conversion line (blue line on my chart)

Conversely, when the price rises above one of these lines, it’s a bullish/buy signal. As you can see on the chart I posted of the Ichimoku, the price rose above the conversion line on June 1st. The next candle (Heikin Ashi) opened entirely above the line the next day (June 2nd), which confirmed this buy signal for me.

Overall, this is a bullish chart — but it does dictate that $8.1k will be a heavy point of resistance if BTC makes it there (price could whipsaw downstairs first or simply never even reach that point — may even potentially re-test $7.5k temporarily before really surging upward <- This happens more often than not on breakouts of any sort, small or large)

Exponential Moving Average (EMA50 & EMA200)

Here is the EMA-50 + EMA-200 (1D TF) for $BTC. We already discussed the death cross that occurred in May. So, I won’t get too much into that at this point.

I showed this because EMA indicators serve as pretty reliable support/resistance points.

Check out this Medium article that I wrote on that:

View story at Medium.com

As we can see on that chart above, we can see that the EMA-50 = $8.2k.

I imagine that it would more than likely drop down to $8.1k by the time Bitcoin gets there (if it gets there). So, that too would be yet another resistance point.

I think you all get the gist of what I’m saying. $8.1k will be a beast for Bitcoin to climb over and I’m not sure that there’s enough in the tank for it to get that far when we look at the volume.

Volume Analysis

Volume Analysis (1D TF)

I mentioned this in the Discord a few days ago, but I believe (not financial advice) that Bitcoin serves as a better benchmark than trading opportunity because of the extremely low volatility on the coin.

Calculating Volatility

We established that the maximum upside here is probably $8.1k.

Right now, it’s trading at $7.7k.

So, that’s a +$400 gain?

400/7700 = .0519 = 5.1% potential upside.

If I were trading stocks, I’d love this. But, since we’re in crypto, this potential upside with the risk being whipsawed out of 2.6% (assuming a re-test of $7.5k & an entry $7.7k, a $200 drop; 200/7700=.0259=2.59%) this just doesn’t feel like the best allocation of resources in the space.

I mentioned before that altcoins have been getting drilled in this market and that the outflow/inflow of money into altcoins was BY FAR the primary reason for the fluctuations in market cap of crypto during the month of May.

View story at Medium.com

Much of this was mentioned in my Market Capitalization analysis that I performed for the month of May.

Average True Range

In terms of indicators, I’ll be using the Average True Range (ATR), which shows the exact amount of volatility on a quantitative level.

If you’re unfamiliar with this concept, I also wrote an article on that here as well:

View story at Medium.com

Average True Range (1D TF)

Here’s the zoomed out version of ATR though, for reference.

Conclusion

That concludes what I wrote about Bitcoin on June 3rd, 2018. Once again, this is just to keep an accurate reflection of the numerous updates from the CryptoMedication regarding the potential future movement of Bitcoin and other coins.

For more FREE and nonstop, around the clock (24/7) analysis and information, follow/join:

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