It is not for certain where the market is headed in the long-term, but it is scary to think that we could go as low as 1300. If this recent drop causes enough panic among HODLers and early investors of , this possibility would not bewilder me. Some may see this as a terrible thing, but I see this as a very fortunate thing for the future adoption of Cryptocurrency. Without the dilution of , it would be almost impossible for adoption to take place as the centralization of large wallets would easily disrupt the stability of as a currency itself. Sir Warren Buffet once said, buy when there is blood on the streets and as traders or investors, we must look at all possibility side of the different scenarios. I see this massive drop as certainly possible, however it would be ignorant to assume outright that this is where we’re headed. I wanted to follow up on my update from my previous idea about this dump being the ultimate bear trap because I certainly do believe this dump is a shakeout in order to fuel the start of a massive Bull rally. The only question is, how low will market makers be able to drive this down to and when they will decide that they’ve done enough shaking?
I will begin my analysis going from higher time-frames to lower time-frames to give you guys the full breakdown of what I see is going on with the markets because the closing of this week is a very crucial week for and the Cryptocurrency market itself. The reason why I say crucial is because this could mean that we’re heading for a major Cryptocurrency market crash (that is driven by big institutions like BAKKT) that want cheap before the launch of their exchange and upon an approval for .
Weekly:
If we continue to head downwards below 5600 and close red this weekend, then we will get a cross on the weekly. This indication would confirm a further downtrend for more months to go, possibly another quarter of being in a bear market.
3-Day:
We have pulsating signals on my private “Magic Hat” indicator indicating that there is a much bigger move incoming. From the looks of it, with the crossing down yesterday, this is an extremely signal indicating likely more downside. The negative-DMI is also beginning to rise up strongly with the following it upwards. This is also an extremely indication of larger movement.
1-Day:
We are trading in the extremely oversold range below 30 (with a length of 21), which is typically where we see a huge bounce in based on historical price action. However, from the price action that I have observed, every bounce attempt has failed and we are failing to break the neckline resistance on the 4-Hour chart (which will I show explain below). We have also been struggling to break above the 50-60 resistance range (with above 70 confirming a bull market). The 50-60 is typically the area of resistance in a bear market and we have not broken above it since July when we rallied to 8.5k.
The one thing that strikes me about the is the huge gaps between each order-block levels that I have drawn out with a blue . There is virtually zero support if we are to break below this trading range. We would be heading straight to 4400, which would be another 1100 point drop from the previous daily closing price.
4-Hour:
So far, the 4-Hour is indicating that we are due for a bounce given that the has crossed up and my “Tommy Oscillator” indicator is putting out buy signals. However, due to the fact that there is virtually zero support below this trading range, this would be an extremely risky trade to take on the long side. This long setup is a potential bull trap for bulls until the neckline resistance of 5645 is broken with a 4-Hour close above (or 1-Hour if you are an aggressive trader).
1-Hour:
The hourly timeframe is where things are starting to get clear about what the next swing will be. Although the 4-Hour is currently , the smaller time-frame of the hourly chart is indicating that a drop would happen before any technicals of the 4-Hour plays out. We have pulsating dots on the “Magic Hat” which indicates that a big move is about to happen, and judging by the histogram and direction of the lines, this move will be downwards. The is also rounding slightly below the 50-RSI resistance unable to break above it. Targets for this drop is below 5200 to run the liquidations and stop losses that are set below the previous low of 5188. I see a possible wick down to 5100 – 5160 depending on the amount of longs that are trapped into this level of 5500 – 5600.
I will not be taking any long-trades here due to the gap below this trading rage or until it is confirmed that this drop is “The Ultimate Bear-Trap” or until we hit my 4400 target as it is the next level of major support.
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Published at Fri, 16 Nov 2018 19:13:33 +0000
