Well, well, well. It looks like finally decided to come down to 3k as I predicted in my previous analysis ;). Let’s take a look at what happened!
Recap
Once broke through the support at 5.8K, you can see that buyers tried to step in and it retested that level, which actually turned into resistance. When we broke through the yearly support it really freaked people out and massive selling ensued. As I expected, the 5K level barely held before we fell lower on huge . A support line I added a couple months ago at 3.8K held decently for a few days, but that eventually failed as well. The next and last stop was the 3K .
This recent sell-off was an excellent trading opportunity, as the move downward created a beautiful pattern. The was also showing , and to top it off we had a Morning Star pattern to identify the bottom of this move. I wish I could have posted as soon as I saw it, but it looks like some others on here were able to identify that bottom pattern. I just hope those of you who actively trade were able to make a little profit from that move!
Not Out of The Woods Yet
Although has attracted buyers near the 3K level, there isn’t any evidence that the bear market is over quite yet. There was a powerful break out from the pattern on decent , and right now seems to have reclaimed the 3.8K level as support. It looks like an inverted could be in the making on the daily, which if formed, could get the price back up to retest the 5K level to either confirm it as resistance or reclaim it as support.
may get back up above 5K short-term, but it doesn’t look likely that it will get back above the 6k level for the next few months, there is just so much resistance at that level. We have the resistance line connecting the lower highs throughout the year, the yearly support line at 6K (likely to turn into resistance), and the 200 day MA (pink line) all near the 6K level at the moment. There is a high chance that will just print a lower high.
I am skeptical of any rallies at the moment because I don’t think that has really capitulated yet, but of course I could be wrong. I was hoping to see much more during the recent sell-off along with a more immediate and sharp recovery. The is more than we have seen recently, but it’s not the massive that you would normally see during a capitulation. This leads me to believe that there may be further downside to come and it’s possible that 3K may not be ultimate bottom in this bear market after all.
What to Look For Moving Forward
It looks like 3K and 6K are going to be key levels moving forward. If we manage to break above and stay over the 6K area, then that would be very but it doesn’t seem like a likely scenario in the near future. The 3K level is important because it is the current and yearly low. If 3K were to break, the next would be around 1.8K and after that would be the stronger of 1.1K , which was the peak of the previous bull market in 2013. 1.1K was also strong resistance at the beginning of 2017, showing that it is an important level to keep your eye on for a possible .
The 200 day MA is also a very important level to watch in helping to identify a bottom. In my opinion, needs to break above the 200 day MA and claim it as support to possibly be considered again. There also needs to be a period of lower accompanied by higher lows and higher highs on the chart to believe that a bottom has been printed. And although I would like to see a capitulation event like in 2015, the market is constantly evolving and the massive day with tons of isn’t something that is guaranteed to happen, but it’s still worth looking out for.
It is important to keep an open mind in this market and not let emotions interfere with your judgement. No one truly knows when or where the ultimate bottom will be, so let the brave go knife catching. It’s better to be patient and let show a solid bottom along with signs of a recovery before considering cryptos to be in a bull market once again. has had an impressive week percentage-wise, but don’t let that trigger your FOMO. Overall, it is still in a downtrend with no sign of a trend reversal yet on a long-term time frame. needs to show a longer time frame trend reversal before we can consider the bear market to be over.
*This is not financial advice. For entertainment and educational purposes only.
-Brad
Published at Sun, 23 Dec 2018 04:04:59 +0000
