Hope for the best, Expect the worst

[Reid]

2-There is no reason to panic if we were to see sub 7k or 8k , it does not mean we were entering a bear market , if that happens, think of it as the PERFECT correction which will give us enough power to break 14k.

Was always looking for another entry point for my buys and I was thinking that anything below $10k was already a good possibility. We're now back at the $10k levels after a harsh correction down to $9300 these past few days and I don't think we'll be seeing a lot more downward action anytime sooner, but then again the forward momentum is still bleak. Orders from the buying side is still weak though, and I don't think the weak hands are already shaken--not yet.

It looks like the shake is over if it aint a correction. The bad side is if they are already accumulating while we are waiting.
Me, will be one of the victim though. 
I am still giving it a week and if this price goes back down then I am buying already. Don't want them to be on the front row while I am just following them.
But if this goes to another stable week or a month then, there is a good chance an upward will come.
Just means the FOMO's are getting stronger hands which traders would not want to happen. 
There should always be volatility for profits.

[FanEagle]

I am not a big charts guy so if you can answer me mikeywith that would be awesome. If we actually hit back on sma20 at 7200 dollars, does that mean it will stop there or could it also keep going down?

I do not understand charts at all so this may sound like an idiot question to you but from my understanding if the longest period where bitcoin went up without touching back to SMA20 seems 154 days from your post and that means could it be also under 154 days without touching it? That would mean that we would eventually reach 7200 dollars (don't know when) and then stay under it for another 150+ days without going back up which is a sad news. However, if it means it might reach 7200 and then go back up then that shouldn't be a big problem since we could eventually recover and go back up.

[nowlscor18]

The best to expect is altcoins will recover to it's profitable price increasing value but the worst is same bearish trend will affect and make the price decline temporarily. Same with whaf we've experienced with btc at first, it pumped high the suddenly falls down.

[mikeywith]

I am not a big charts guy so if you can answer me mikeywith that would be awesome. If we actually hit back on sma20 at 7200 dollars, does that mean it will stop there or could it also keep going down?

IF we reach the 20SMA it's more  likely than not that we do NOT go below it, i'd would say 70% we bounce back 30% we drop below

I do not understand charts at all so this may sound like an idiot question to you but from my understanding if the longest period where bitcoin went up without touching back to SMA20 seems 154 days from your post and that means could it be also under 154 days without touching it? That would mean that we would eventually reach 7200 dollars

Not really, you should understand how moving averages work, without having to go into explanation on the different between SMA that uses open price, high, low etc. let me explain the default setting which are usually the closing price of each week.


every weekend (Sunday) midnight whatever price is at that moment is recorded into a table, same things happens every week, the average of the last 20 weeks is taken by adding 20 numbers dived by 20.

which means, based on the last week's reading including the previous 19 weeks closing prices, the 20SMA is at 7200, but if this week closing price will change it, it could be 7400 or any other number depending on the closing price.

now if you understood the above, you should understand that for btc to correct at 7200$ it must happen before Sunday this week, which is very unlikely to be realistic, and since the current value 7200$ takes into account some closing prices of 4k or even 3k it means that even if price stays leveled at 9-10k the 20 SMA should only rise.

now the correction to 20SMA must happen sooner or later, the 7200$ is the worst scenario, provided btc sinks anywhere from today until Sunday, but assuming it doesn't correct to the 20SMA until say Sep then the lowest it can go would be 8500$, if it happens in OCT that could be 10k etc.


long story short : forget the number, watch the moving average itself, if you are looking for a buying opportunity that  20 SMA is a golden chance, but no matter what you do, do not wait for price to get to 7k or 8k , as I mentioned earlier, I am slowly buying my way up, every dip should be bought, and keep in mind the bigger the gap between current price and 20SMA the bigger the correction, even if btc was to head to 20k in a few weeks and the 20SMA still hangs around say 13k, price has to go back to test it, so learn to take profit if you want to trade, if you want to hodl for years then you should not waste your time reading any TAs because these are more like short term.

[BitHodler]

Orders from the buying side is still weak though, and I don't think the weak hands are already shaken--not yet.

The increase of 15% today was followed up by fairly strong volumes. It's impossible to expect more given how uncertain the market still is. People aren't going in full but keep some aside just in case.

If we can have a bullish close on the daily chart we are likely to see +$11k levels, but this leg up could still be another lower high, so we shouldn't get overly excited even when the price touches $12k in the coming weeks.

As far week hands not being shaken out, most definitely not, but we've done well to shake out enough to fuel the current increase. Time will tell whether or not it will last, but people are certainly happy with it.

[mikeywith]

Orders from the buying side is still weak though, and I don't think the weak hands are already shaken--not yet.

The increase of 15% today was followed up by fairly strong volumes. It's impossible to expect more given how uncertain the market still is. People aren't going in full but keep some aside just in case.

An old school trick/rule that can help you identify a strong buying momentum vs a weak one is the higher highs and higher lows.  

The scenario below would be a good indication that this mini rally is here to stay and it will be hard to reverse it





The scenario below means this likely just a correction of the down trend and more is to come.




Realistically this weekly candle needs to close above the 5SMA which is at 10738$ for it to be considered bullish in the short term, as you can see in the chart below the 5 SMA (blue) is putting a lot of resistance which won't be easy to break, but if we do close above it, that's great news.

[mikeywith]

An update on the current situation regarding this analysis.


The current 20SMA on the weekly is at 7591$ not a bad increase from last week , now from now till end of the week any drop to that level of 7.5k should not be taken as the end of this rally, so stay calm.

overall the trend is losing momentum, a month or two of consolidation and most likely lower highs is to be expected, also keep in mind that we are 35% far from the last high BTC made so selling now is not the best thing to do, for those who still looking for good entry points 8.5k to 9.5k should be it, and of cource if you are a trader, it would be safe to buy BTC near the 20SMA and to short it if price closes below it.

[STT]

The OP chart seems a fair call, I dont count the high we've fallen from now as that special.   I dont think its too late to sell just we might need a stop loss as prices do need to confirm their weekly bar or whatever is the wider look

So on 4hr bar view price is increasingly weak and I count it as such while under 10,400.    It can recover but I reckon a sell is fair while its submerged in this way



its not a clear chart but on the daily bars for me we explored our range upwards and hit the previous positive trend, its not surpassed that.   Since thats capped the upside, I think downside is more possible.   I would be alot richer if I could find the right confidence timing, its not easy because usually you have to overcome the markets doubts and noise but for what its worth Im more bearish for the moment.

[exstasie]

overall the trend is losing momentum, a month or two of consolidation and most likely lower highs is to be expected, also keep in mind that we are 35% far from the last high BTC made so selling now is not the best thing to do, for those who still looking for good entry points 8.5k to 9.5k should be it, and of cource if you are a trader, it would be safe to buy BTC near the 20SMA and to short it if price closes below it.

Agreed, except for shorting below the 20-week MA. Once the trend has reached that far, it's likely to be near a local bottom.

Take the August 2015 crash, for example. By the time the weekly closed below the 20MA, price hit the ultimate bottom less than a week later just 13% lower. You could easily short the bottom that way.

I would prefer to find a local bottom, then short the subsequent bounce to the 20MA, like February/May/July 2018. That way you don't have to hold shorts through such a painful drawdown.

[mikeywith]

Agreed, except for shorting below the 20-week MA. Once the trend has reached that far, it's likely to be near a local bottom.

Here:




I am not sure if we are talking about the same 20MA here, the one I am using in this chart is the 20 Simple Moving Average on the weekly chart, and as you can see in the image above, every time we closed below the 20SMA on the weekly the trend shifted from bull to bear, except for what happened in Aug-2015 but that wasn't even a bull market then.

so in other words, I give a lot of thoughts when comes to major SMAs like the 20SMA , specially on time frames like the weekly and the monthly, so I have to disagree with finding local bottom below the 20SMA, because if that happens ( unlikely) then we will enter a bear market for a good period of time, the bottom should be at around the 20SMA or slightly above it.

[exstasie]

Agreed, except for shorting below the 20-week MA. Once the trend has reached that far, it's likely to be near a local bottom.

Take the August 2015 crash, for example. By the time the weekly closed below the 20MA, price hit the ultimate bottom less than a week later just 13% lower. You could easily short the bottom that way.

I would prefer to find a local bottom, then short the subsequent bounce to the 20MA, like February/May/July 2018. That way you don't have to hold shorts through such a painful drawdown.

Here:

Yes, you can see in those examples exactly what I'm talking about.

You said it's "safe" to short once we close below the 20-week MA. In February 2018, that meant shorting the February 5th open ~ $8,000 when the market literally bottomed the next day and then bounced to $11,800. Shorting based on a weekly signal one day before the bottom, so you can be immediately stopped out or otherwise eat a 50% drawdown? Bad strategy!

That's why I suggested to use the 20MA breakdown as a signal of a bear market, but not as a short entry. The chart shows clearly that you should not short the breakdown itself, but rather the subsequent bounces to the 20MA. In other words, wait for a local bottom below the 20MA then short the bounce once you see buying exhaustion.

The parallel here: If you're entering shorts in the $7,000s after a 45-50% drop has already occurred, you better not be trading the weekly chart. You better be ready to exit very quickly on lower time frames. Unless you like getting your shorts squeezed for the next several weeks, that is.

I am not sure if we are talking about the same 20MA here, the one I am using in this chart is the 20 Simple Moving Average on the weekly chart

Yes, the 20-week MA.

and as you can see in the image above, every time we closed below the 20SMA on the weekly the trend shifted from bull to bear, except for what happened in Aug-2015 but that wasn't even a bull market then.

It makes sense to shift from longing mode to shorting mode.

But you make it sound like one should just start shorting when the weekly closes below the 20MA. That's not a good decision. One should wait for a proper short entry with decent risk/reward. That's all I was saying.

[mikeywith]

Shorting/Longing break-outs depends on your trading style, if you are an aggressive trader you would short right after the break and your SL would be above the 20SMA, being conservative is doing exactly what you suggested.

your way is safer and has better R:R ratio , however many times you will miss the trade, since there is no guarantee for price to re-test prev support/resistance, but by all means if  one does not trade intra-day and base entries and exists on smaller time frames, then waiting for a re-test would be the better way of doing things.

It makes sense to shift from longing mode to shorting mode.

Glad we agree to the main point of my theory here, regardless of how anyone is going to trade the market, it's safe to say that we are in a bear market when that happens.

Anyhow the chances of that happening now is very low, i suppose we will test the 20SMA  three to four times before this bull market is finally over.

[Ararbermas]

I personally check the bad first to assure how long the progress will last.  And in order for me to make a temporary startegy as well. Actually i always check the both side ,but on this situation i believe bad things has a possibility always to happen afterwards due to some factor.. And in fact im not expecting a long  bull run on this circumstance since market always collapse.  And for me much better to quick selling in my opinion rather than expecting to much progress with bitcoin.

[exstasie]

Shorting/Longing break-outs depends on your trading style, if you are an aggressive trader you would short right after the break and your SL would be above the 20SMA, being conservative is doing exactly what you suggested.

I'm all about trading breakouts. I just don't consider that a breakout. More of a trend signal.

your way is safer and has better R:R ratio , however many times you will miss the trade, since there is no guarantee for price to re-test prev support/resistance, but by all means if  one does not trade intra-day and base entries and exists on smaller time frames, then waiting for a re-test would be the better way of doing things.

I think your method is fine for selling at spot, but shorting just seems too risky. My system requires minimum 2.5:1 risk/reward which usually won't be possible in that situation, not after already falling so far.

Anyhow the chances of that happening now is very low, i suppose we will test the 20SMA  three to four times before this bull market is finally over.

Yes but I wonder where the MA will be when it's finally tested. Something tells me $7,500 is too far.

[mikeywith]

Yes but I wonder where the MA will be when it's finally tested. Something tells me $7,500 is too far.

"too far" is too generous  , i would say it's nearly impossible, because if 20SMA test is going to be around 7500$ then it has to happen this week, that's 2k drop in 3-4 days , I don't see that happening to be honest, next week the 20SMA will be at around 7800$, the week after that probably 8000$ or a bit higher, but no matter what, we are more likely than not going to test it in a few weeks regardless of where it is.

[UnDerDoG81]

If we hover at these levels of 8000-10000 over the summer, I am cool with it  That's the bottom of the next run then.

[mikeywith]

Are you watching this triangle set-up?





The break out to the downside of this triangle on the 4H chart might ignite the down trend momentum to 8k ,  we made 3 higher lows and 3 lower highs, so a break out to either direction will be a good trade, given the fact this is a down trend chances are higher on the downside.

If we hover at these levels of 8000-10000 over the summer, I am cool with it  That's the bottom of the next run then.

You might want to extend the range a little bit, 2k area for BTC for a whole summer is unlikely.

[RealMalatesta]

I think anything under 10k is a good entry point, I know its not going to be that easy to make yourself ready for under 10k because that would mean the price is going down and everyone is afraid of getting into bitcoin when its going down and I know it sounds a lot better to get into bitcoin during a bull run.

However, the reality is that if you try to get in during a bull run you may end up like the guy who bought at 13k and not like the guy who bought during 3k. So, when it goes down as low as 4k and even lower and when people were afraid that it might go under as low as under 2k there was people who bought under 4k and now they doubled and even trippled their money whereas people who were expecting it to go under 2k lost on good profit. Don't let yourself be like them and buy under 10k to sell over 13k to make a good profit.

[exstasie]

Are you watching this triangle set-up?

Seems we're close to the apex now. I wonder if we'll get a real triangle breakout or if it'll just keep sideways through the bounds. I guess I'm waiting for a clean break of $9,500 or $10,200 at this point. My bias is still bearish for now but I'm a bit surprised at how hard this range is being defended by bulls.

[STT]

My chart is messy so I wont post but sure I can see a triangle , my natural bias is to see the downtrend there as stronger but if it breaks past 10,223 then I'll take it that triangle broke out bullish and upwards there after.     Its only two weeks in size but thats enough for us to be retesting the upper prices again over 11,000 I guess.    $11,700 is my target for a breakout upwards, this is the previous daily trend going back months.   It can hover and decide direction once again in that area.