Important Levels To Watch in Bitcoin [BTC]! (BTC)

Important Levels To Watch in Bitcoin [BTC]! (BTC)

Hi friends! Welcome to this update analysis on bitcoin [BTC]! Let’s get right to it! Looking at the four hour chart, you can see that BTC is currently not making much progress, in terms of heading higher to complete this potential right shoulder. The lack of upside momentum here is not very convincing at the moment, but technically, this pattern could still complete an inverted head and shoulders pattern. Since the market is just chopping sideways, it’s impossible for any of us to know exactly which direction the market will break to. However, we can discuss the most important levels to monitor, and why we should be paying attention to them.

On the chart, you can see that BTC was in a big bull flag (in black,) and it actually had a weak breakout to the upside. We can see that price has since rolled over, and now it looks like it could fall to the top of the flag to test it for support. Now, if we see a test of the top of the bear flag , which holds as support, that would actually be a bullish sign — one that could lead to a completion of the right shoulder.

However if the top of the bull flag is lost, we would then be looking at a failed bull flag breakout, which is not the kind of follow-through strength you want to see in the right shoulder of a potential inverted head and shoulders pattern. Furthermore, if we start to break down below the December 27th low of 3567, that would dramatically reduce the likelihood of this being an inverted head and shoulders pattern, and it would increase the likelihood that we have actually just printed a lower high in the downtrend. Technically, the right shoulder of an inverted head and shoulders pattern could go as low as the head, but it’s best to be defensive, since we are still in a bear market downtrend. If you look at the chart, it is nothing but lower highs and lower lows. So, there is no doubt that the bear market downtrend persists.

Just to clear up any questions, I am definitely still long term bullish on the crypto space, even if we do see a failure of the inverted head and shoulders pattern. As I’ve said on numerous occasions, I do not believe that the bear market is over. What does that mean? Well, to me it means that even if we rally substantially off of these levels (say up to the low 5000s) I still believe that price is likely to then head back to the downside, as we enter a long sideways consolidation period in the market. At some point we are likely to start grinding mostly sideways, and that could persist for a couple of years. That’s the most likely way that we will see the final stages of this bear market. With that said, I also believe that crypto will have another powerful bull market after that consolidation period. For now, we have to continue to monitor this whipsaw action in bitcoin , to see what direction it will finally break to. So, keep an eye on the top of the bull flag , the neckline (in blue,) the 50 EMA (in orange,) and the December 27th low of 3567 on the downside.

I’m the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.

***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***

-JD-

Published at Fri, 04 Jan 2019 16:18:42 +0000