BTC trapping sellers before one more bounce?

Jan 22, 2019

BTC is currently in a very important support zone on the daily timeframe (range low).

Although we've seen a large red candle two days ago, wicking into 3400s, there was enough demand to push the price back up and the daily candle closed back inside the range (potential swing failure pattern forming).
The low wick has taken stop losses below, but the sellers failed to follow the push down.

Ideally I would have liked to see the price fill the gap below and tap into 3250s and then bounce strongly to the upside, but we can't ignore what is currently forming on the chart here, which is why I'm posting this analysis.

For validation of this trade, we want to see a candle close above 3565, after which I expect that area to hold as a regained support (currently resistance).

Targeting the resistance areas above:
1. 3649
2. 3780
3. 3849 (less chance to be reached, but still within range)

If the bulls fail to take over here (3530-3476) and push this above 3565 (local pivot point), then I doubt 3430 (weekly support) will hold for long.
After a candle close below that level, we can expect 3330-3250 area to be reached next.

Jan 22, 2019

Note

As emphasized above, breaking below 3430 with a *closing candle* will invalidate the trade and take the price to 3336-3250 area.

We've seen a stop loss hunt to 3400, but the candle quickly reversed (within 10 minutes) and closed as a bullish hammer, which adds another validation to the trade setup posted above.

There was no 4h candle close below 3430, therefore the trade is still active.

Jan 23, 2019

Note

After yesterday's candle closed as a bullish hammer, bulls were expected to take over the control and push the price higher with buyers following up and keeping up with the buying pressure today (ideally closing today's candle higher than yesterday's), but the attempt to break above the key resistance in the 3600-3650 area today printed a high-volume rejection candle on the 4h timeframe, which is not what the bulls want to see here.

It's a first warning sign that this might not be ready for a stronger push higher just yet, and might be ranging here in the 3600-3430 zone still.

On shorter timeframes, we see 3530-3500 to be the support area. If it holds and consolidates above that, it could keep the momentum alive for another attempt at higher prices later during the week.

Otherwise, this might end up as yet another fakeout (as we've seen many failed attempts already during the past days).

Weekly support still at 3430 and we do not want to see any 4h or daily candle close below it, otherwise, 3336-3250 area comes into play again.

In summary: Trade is still active, but be careful wtih stop loss, I'd lock in partial profits here in the 3580-3600 area if you already haven't, and let's see how this develops by the end of the week.

Jan 25, 2019

Note

The pivot point (S/R flip) has been lost again and confirmed as a resistance.

Nothing changed since my last update on BTC.

This chart looks bearish for now, and as long as the price moves below 3560-3580 area, it will stay bearish and will have higher probability of breaking down towards weekly support at 3430 (already weakened since it bounced from there once).

Closing below that will take it to 3336-3250 area where I'd look for some kind of a bounce or reversal with higher probability.

Even though it looks bad, I'd avoid shorting this since it's so close to a major support zone and these moves are all on relatively low volume, not much trading happening here, lots of stop-loss hunts on both sides, it's just a chop in a tight range, consolidating before the next bigger expansion waiting to happen.

While in this range, I'd watch 3560-3580 area for bias.
Below it, short-term bearish. Above it, short-term bullish.

Best to wait it out and let the market reveal more clues as to where it wants to go, and then join on that move.

Jan 28, 2019

Note

The price has reached the 3430 weekly support mentioned above, and now we want to see if this daily candle will close below or above it.

If it closes below, I'd expect 3330-3250 area to be reached next, where there could be a higher probability bounce, which makes it an attractive buy area.

If 3250 does not hold and the price closes even below that (wicks are fine), then we could see new lows.

Again, I still do not expect this market to make significant new lows, and I see this drop only as a low volume retracement on the daily timeframe.

Forming a higher low around 3250, or even a "failed low" around 3000-2900 as a bear trap would be very constructive for the coming weeks.