Bitcoin has already fallen quite a lot from it's recent high. But is now a good value buying opportunity - or are there yet better value buying opportunities ahead?! Whatever the answer turns out to be after the fact, I thought it might be interesting to discuss some of the current charts.
(1)
Current triangle formation
This looks to be a reasonable triangle formation to me (at least in regard to the bottom slope).
(But right as I'm typing this, the price looks to be a bit droopy, so it will be interesting to see whether we stay within the triangle at the time this post goes out! :) )
(2)
Let's look at the previous triangle formation from several months ago for comparison purposes.
The previous triangle broke downwards. So, if the pattern repeats, then we might expect a downward break at some point (but this is only if it repeats! :) )
(3)
I would say EMA cross-over points are most important thing I use for buying/selling decisions. (Although, often if you wait for the cross-over to actually occur, the price may have already jumped or fallen by large amounts!)
Here's the 12 hour chart, with buy/sell signals marked for this strategy and timeframe
I've chosen this timeframe because on both the previous rise of a few months ago, and the recent rise, we did not get any change-overs on this time-frame. Ideally, for any rise I would like to choose the time-frame that had no change-overs during the whole of the rise - because this means you just have one buy signal near the start of the rise and one sell signal somewhere hopefully close to the top!
As we can see from this chart, we have just had a cross-over in the negative direction, so if you were using this strategy then you might have been looking to sell at an opportune point close to the cross-over.
(4)
MACD cross-overs do not give the same certainty as EMA cross-overs because they are a derivative of the EMAs - they kind of measure EMA difference acceleration/deceleration. But sometimes they can work very well. As we can see from the following chart, the 3 day MACD has turned out to be a great match so far this year for rough times to buy/sell on a longer timeframe:
On the current chart it's still green - but it looks like it might be close to going red. So, If you were using this chart for deciding when to buy/sell, then you might be anticipating the colour going red soon and the resulting 'sell signal' implication.
(5)
So, some of the above charts might point to currently having a 'sell' position if you were following them - but if so, how deep could we expect a dip to be? For comparison, lets look at the previous dip we had a few months back.
I'm never sure where to place the starting point for a fibonacci retrace pattern, but the top is always obvious at least ;P
Anyway, with the starting point I chose, we ended getting a dip which was pretty close to the 61.8% retrace level.
(6)
Now, lets plot a fibonacci pattern for the current top (again, the starting point is subjective).
I've also marked a magenta line to indicate the potential scenario if history were to repeat itself and we got another retrace to the 61.8% level (but this a very big if!) Note: This is not a prediction - it's just an example of one scenario. Personally, I can only really guess at which level we might retrace to (if at all)! Generally, I'd be expect at least a 50% retrace though - so I might place a buy order just above this level - followed perhaps by more buy orders all the way down :-)
(7)
Finally, another option might be to consider the whole overall move which started at the beginning of the year for possible fibonacci retrace levels (again, the starting point is arbitrary):
On this chart, for variety, I've chosen to the scenario where we might bounce on the 50% retrace level - but this is in no way a prediction!
Concluding remarks:
Will the price go up or down from here or even stay at roughly this level? Everyone must make up their own mind. Charts can only show what's happened in the past. Personally I'm leaning towards being bearish right now - based primarily on the EMA and MACD charts I presented above. However, these types of chart indicators can flip back very quickly - and if they do, I'll be changing my outlook immediately! And, while some of the charts show a potential dip scenario, please bear in mind that anything can happen - including continuing upwards to $1000 or more instead.
Also, as we saw during the previous dip: As well being a good buying opportunity, it bounced back higher than it started off. In this way, a correction can be a very positive event (provided you don't end up selling at the bottom, and not buying back in!) Also, if you believe long term that the price will be higher, then just holding (and not trading) is a good strategy.
Disclaimer:
I'm not offering and trading advice. Any reader of this post must take complete responsibility for any trading decisions they make. Instead, I've only shown some charts and some possible trading strategies/signals (out of many); and, any signals like these can end up losing money rather than making money. And, other signal/strategies might point to taking the opposite view. (The 'art' is trying to decide which signals to use at any given time!)
Comments welcome [ but please - only related to 'boring technical analysis' :) ]
Anything I could do better (I want to present a balanced/objective view, but still give my personal comments).
Any TA counter-arguments?
Again, thanks to @karensuestudios for my avatar (and the above animation)!! :D
Great analysis! I believe the bitcoin price will drop and we will have a correction towards ~$3200 very soon with the news from China before we have another rising trend. There was a bearish engulfing pattern when Bitcoin was near $5000 and according to Elliot Wave Theory, it is likely that the price have finished the five rising waves and now it is probably going through the c wave, with the previous lowest point at a = ~$4000 and highest point at b = ~$4700.
Source image
Good analysis..
As 4236 was broken ..
Bitcoin will move toward 3793 for now..
Thanks :)
Very interesting, thanks for sharing.
Let me get my fiat money ready 🤑
Mine is ready $.$
News from China is anything but the gossip that i would not call the news that has happened before many times already. Who is the official source anyway?
And having in mind in the debt economy all those dollars need to go somewhere and they are definitely not going to Bond or stock markets. Some went to gold and silver already and the rest is going to end in cryptocurrencies in my opinion or it might be just a wishful thinking :-)
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@xaero1
Wow your technical analysis is great , makes me wonder why you dont share more often..I missed your post my buddy bud
Looking at this with the strategic lens of efficient market hypothesis, I conclude that it depends : on the current news , and speculative movers and shakers of the market because it is not efficient. So my strategy in crypto like bitcoin will be to gradually buy and hold because the future looks bright in the long run. However as I indicated in my blog posts, steem ecosystem will be a force to recon with in few years time..Hiyaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa
The Blockchain is a great technology and for the time being we can expect that emergent nature of the community will overcome all the bans, governments and restrictions and to continuously change technology on its way.
Having said this it's very difficult to bet on the right crypto, which one will be the one that will solve the specific issue of the moment?
My suggestion would be to:
I wrote a small series on diversification benefits and the income that can be created through it.
CryptoPortfolio - Extract a "diversification dividend" - Part 1: Geometric and Arithmetic Returns
CryptoPortfolio - Extract a "diversification dividend" - Part 2: Portfolio Risk and Diversification
CryptoPortfolio - Extract a "diversification dividend" - Part 3: How to make 8% more per year
I would be grateful to anyone who wants to take a look and let me know what he/she thinks! Thanks
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Informative post! I would like to buy on dips. Thanks for sharing.
Thanks for sharing this analysis.
The first one looks like a 'X' for me and not a triangle.
Someone got a 'X' at America's got talent but not you because your post is for semi-final.
I resteemed it, in long term I thing we don't have to worry about bitcoin growth.
Wonderful info about bitcoin it's really a great info which you posted now. But I can't do so becoz of my money problem. But I'll buy soon from my steemit money. Once again I appreciate your writing.....
good analysis with clear pics to understand rise or fall with clarity of future pic, keep informing.
You come back again as a trade person...👍
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good luck brother
@xaero1
Please help me . I'm new in steemit. please see my post
Already broke 4000! Shopping time.
"Sometimes a deep sense of disappointment is caused by our exorbitant expectations of something"
"Every beginning there must be an end and every problem there must be a solution. Never give up, confident and happy to wait "
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@xaero1
Thanks so much for putting the effort into this post. Who knows what the market will do but I think the technical indicators show a probable correction in place. Either way this is good for us... Buy low and sell high people!
welcome to your new article....
"No matter what your day, never let someone make you feel that you do not deserve what you want"
keep fighting to get what you want ,,, good luck @xaero1
BTC i decreasing now its time to invest in bitcoin bro good luck
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I start trading, can you guide me in crypto, I start from a little, this capital from parents maybe next week I fill again, do I match trading steem and what your response to me, I hope my help, I come from Indonesia , my country's currency is very small compared to usd
@xaero
its great to have your analysis back looks like it could break soon enough as per my guess but lets see
analysis is very interesting, I get a lot of knowledge thanks to your post, true as you say, bitcoin prices are now unstable again may be good as you say and I will wait for your next post about bitcoin graphics because I have started trading bitcoin @xaero1
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@xaero1
hint hint hint! LOL okay I'm not going to miss this hint this time! hahah moved the money I earned from ya over now :) Thanks! :) Steem Dollar went down a little, but Bitcoin is down even more! yay! LOL. Bought bitcoin and litecoin this round.
Did you end up selling and trading on all the highs and lows like you pointed it out on the graph? hehe That would be amazing if so. I can't believe there are so many micro dips in just 12 hours. Seriously, you have lots of patience! LOL
hehehe the little avatar is so cute! thanks for featuring it. :)
Now that you made a post... prepare for da spam! hahah Good hearing from ya even though you may suffer a bit now! :)