My Thoughts on Bitcoin as of August 4th 2018
Hello, fellow crypto enthusiasts, investors, and traders. I hope you are all having a great weekend!
Okay, let's get right into it. Once again Bitcoin was rejected at the daily 200 SMA, this makes the fourth time (my count) that Bitcoin has approached but failed to push above the 200 SMA. I believe this shows just how strong of resistance the daily 200 SMA really is and how important (bullish) it will be when Bitcoin eventually does break above it. It is possible that it will take some sort of bullish event to occur before this will happen, possibly the SEC approval of one of the Bitcoin ETF's this month. This could cause an upward movement with enough momentum to break through the daily 200 SMA. On the flip side if both ETF applications are rejected by the SEC this could be the catalyst for continued selling and possibly new lows. Personally, I would rather see Bitcoin bounce in the next day or so and continue to create higher lows as it moves higher once again. I would also like to believe that the bottom has already been set for Bitcoin at just under $6000. Obviously, I have no way of knowing just what Bitcoin will do over the next days and weeks, long-term I remain very bullish but in the short to medium-term I am probably more neutral to bearish. I still get the feeling that the correction the whole crypto market has been in for months now still has a ways to go yet before we see the next real bull market.
I published three charts of Bitcoin on July 31st with my thoughts on what I see as three possible scenarios Bitcoin could follow. Unfortunately, it was hidden for violating the house rules (I included links to my website and store), that was totaly my fault, I should have been aware of the rules ahead of time. Anyway, I though I would include those charts and thoughts again here (without the links) for anyone who may be interested in seeing it. I have also added updates to the charts and analysis.
Scenario #1 ( Bullish scenario) - In the chart above shows that Bitcoin has broken out of the top of the descending triangle it has been forming for many months.
It also shows that with the recent pull back, Bitcoin is now re-testing the upper trend line of the triangle before continuing it's march higher. In my opinion for this scenario to be validated Bitcoin will need to bounce off of the trend line and continue it's move higher. I believe a failure to follow through in this manner would invalidate this scenario. Update: Bitcoin failed to bounce and broke through the trend line, therefore this scenario is invalidated.
Scenario #2 ( Bearish scenario) - In this scenario Bitcoin has not broken out and in fact still trades within a descending triangle . Due to the fact that a descending triangle is a bearish continuation pattern, the move higher that Bitcoin has made over the last month was nothing more than a move to the triangles upper trend line . For this scenario to play out further I would expect a continuation down to near the lower trend line , and possibly a break below the trend line to new lows. If instead Bitcoin pushes higher and breaks out above the upper trend line , that would invalidate this scenario. Update: Bitcoin did not breakout above the triangles upper trend line and is now moving lower so IMO this scenario is still valid.
Scenario #3 (Neutral scenario) - In this scenario Bitcoin -5.69% is in a consolidation phase and is trading in a channel which started months ago. There is no telling how long this could continue, it could go on for many more months or it could end very soon with a break out above the upper trend line . I am just as anxious as anyone for Bitcoin (and cryptos in general) to take off to new all-time highs but I believe a long consolidation phase would be very healthy for BTC.
Okay, let's get right into it. Once again Bitcoin was rejected at the daily 200 SMA, this makes the fourth time (my count) that Bitcoin has approached but failed to push above the 200 SMA. I believe this shows just how strong of resistance the daily 200 SMA really is and how important (bullish) it will be when Bitcoin eventually does break above it. It is possible that it will take some sort of bullish event to occur before this will happen, possibly the SEC approval of one of the Bitcoin ETF's this month. This could cause an upward movement with enough momentum to break through the daily 200 SMA. On the flip side if both ETF applications are rejected by the SEC this could be the catalyst for continued selling and possibly new lows. Personally, I would rather see Bitcoin bounce in the next day or so and continue to create higher lows as it moves higher once again. I would also like to believe that the bottom has already been set for Bitcoin at just under $6000. Obviously, I have no way of knowing just what Bitcoin will do over the next days and weeks, long-term I remain very bullish but in the short to medium-term I am probably more neutral to bearish. I still get the feeling that the correction the whole crypto market has been in for months now still has a ways to go yet before we see the next real bull market.
I published three charts of Bitcoin on July 31st with my thoughts on what I see as three possible scenarios Bitcoin could follow. Unfortunately, it was hidden for violating the house rules (I included links to my website and store), that was totaly my fault, I should have been aware of the rules ahead of time. Anyway, I though I would include those charts and thoughts again here (without the links) for anyone who may be interested in seeing it. I have also added updates to the charts and analysis.
Scenario #1 ( Bullish scenario) - In the chart above shows that Bitcoin has broken out of the top of the descending triangle it has been forming for many months.
It also shows that with the recent pull back, Bitcoin is now re-testing the upper trend line of the triangle before continuing it's march higher. In my opinion for this scenario to be validated Bitcoin will need to bounce off of the trend line and continue it's move higher. I believe a failure to follow through in this manner would invalidate this scenario. Update: Bitcoin failed to bounce and broke through the trend line, therefore this scenario is invalidated.
Scenario #2 ( Bearish scenario) - In this scenario Bitcoin has not broken out and in fact still trades within a descending triangle . Due to the fact that a descending triangle is a bearish continuation pattern, the move higher that Bitcoin has made over the last month was nothing more than a move to the triangles upper trend line . For this scenario to play out further I would expect a continuation down to near the lower trend line , and possibly a break below the trend line to new lows. If instead Bitcoin pushes higher and breaks out above the upper trend line , that would invalidate this scenario. Update: Bitcoin did not breakout above the triangles upper trend line and is now moving lower so IMO this scenario is still valid.
Scenario #3 (Neutral scenario) - In this scenario Bitcoin -5.69% is in a consolidation phase and is trading in a channel which started months ago. There is no telling how long this could continue, it could go on for many more months or it could end very soon with a break out above the upper trend line . I am just as anxious as anyone for Bitcoin (and cryptos in general) to take off to new all-time highs but I believe a long consolidation phase would be very healthy for BTC.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.