Good morning, traders. It is Columbus Day in the U.S. which means professional traders are enjoying a 3-day weekend so volume is lighter across all financial markets. This includes the crypto market.
After another lackluster, sideways weekend, Bitcoin finally pushed up and through the resistance of the July triangle this morning. The question is, can price remain above the triangle now that it has done so? If so, then it would suggest that the TR (trading range) since October 3rd has been re-accumulation on the smaller TF (time frame) and this recent push up and out of it is an SOS (show of strength) off the LPS (last point of support). At this point, we would need to see a pennant/flag printing at the top of the TR where price is currently sitting. Failure to do so will suggest a likely drop below the bottom of the TR at $6510 and I will be looking for an initial bounce at $6450-$6466. Another leg up should find initial resistance at around $6740 which is the top of the next symmetrical triangle. Zooming out a bit to the 4H, we can see that price has continued printing a possible large ascending channel. I say "possible" because we have not seen four alternating touches of support and resistance to confirm that channel yet. However, as we can also see, the target based on the widest part of that triangle would be the top of the channel and that would give us our fourth touch which seems to suggest the likeliest price route. But until then, the ascending channel drawn as it is may or may not be true. RSI and MACD are bullish on most TFs and OBV continues to rise suggesting that smart money is still accumulating and, therefore, the price trend is legitimate. The daily pivot sits at $6700 which means a push up through the bottom of it, and subsequent close above, should indicate bullish momentum on that larger TF. The only real issue I have on all of this at the moment is that volume on the 1H is dropping even as price is making higher highs. We would need to see continued expansion of volume coinciding with the upward movement to alleviate this concern. That being said, the 4H TF volume on the current candle is closing in on the previous high candle's volume with another 2 hours remaining.
Although price has continued playing out as it has, there still remains the possibility of a TS (terminal shakeout). That means that we could see price drop suddenly, below the corrective June low, at any time and pop back up just as quickly. Traders choosing to enter a position in this area, whether long or short, are increasing their risk exponentially, and much more than that if they are trading on margin. The latter combined with a TS will likely result in traders on both sides of the shakeout being liquidated. Remember, hard, sudden moves in this market tend to see the exchange Websites inaccessible and TPs (take profits) and SLs (stop losses) not firing.
After another lackluster, sideways weekend, Bitcoin finally pushed up and through the resistance of the July triangle this morning. The question is, can price remain above the triangle now that it has done so? If so, then it would suggest that the TR (trading range) since October 3rd has been re-accumulation on the smaller TF (time frame) and this recent push up and out of it is an SOS (show of strength) off the LPS (last point of support). At this point, we would need to see a pennant/flag printing at the top of the TR where price is currently sitting. Failure to do so will suggest a likely drop below the bottom of the TR at $6510 and I will be looking for an initial bounce at $6450-$6466. Another leg up should find initial resistance at around $6740 which is the top of the next symmetrical triangle. Zooming out a bit to the 4H, we can see that price has continued printing a possible large ascending channel. I say "possible" because we have not seen four alternating touches of support and resistance to confirm that channel yet. However, as we can also see, the target based on the widest part of that triangle would be the top of the channel and that would give us our fourth touch which seems to suggest the likeliest price route. But until then, the ascending channel drawn as it is may or may not be true. RSI and MACD are bullish on most TFs and OBV continues to rise suggesting that smart money is still accumulating and, therefore, the price trend is legitimate. The daily pivot sits at $6700 which means a push up through the bottom of it, and subsequent close above, should indicate bullish momentum on that larger TF. The only real issue I have on all of this at the moment is that volume on the 1H is dropping even as price is making higher highs. We would need to see continued expansion of volume coinciding with the upward movement to alleviate this concern. That being said, the 4H TF volume on the current candle is closing in on the previous high candle's volume with another 2 hours remaining.
Although price has continued playing out as it has, there still remains the possibility of a TS (terminal shakeout). That means that we could see price drop suddenly, below the corrective June low, at any time and pop back up just as quickly. Traders choosing to enter a position in this area, whether long or short, are increasing their risk exponentially, and much more than that if they are trading on margin. The latter combined with a TS will likely result in traders on both sides of the shakeout being liquidated. Remember, hard, sudden moves in this market tend to see the exchange Websites inaccessible and TPs (take profits) and SLs (stop losses) not firing.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.