The 3 failed breakouts happened on the weekend, will be interesting to see if that happens for a 4th time. The more legitimate bull runs happened with small MACD bars rising and not these medium sized solid bars (see chart above).
I mentioned to our members in the “war room” that my gut feeling was that this is a fakeout. However the charts are showing some bullish hints here and there. Technically, buying a strong break above $281 is the safest play outside of catching a dip in price when ones intuition is advising caution.
We have been confident in BTC price movement the last little bit, and overall bullish since $170. We mentioned the other day that this rally was feeling a bit long in the tooth, and with the hard resistance at $281 it is tough to be bullish right now.
For now trading the price channel seems to be in style (see chart above). If a strong breakout above $281 can occur more market makers will add volume again.
BTC price fell flat on its face trying to hold above $281 again. A new low was also made, thus putting a damper on the Elliot Wave bulls hoping for an open near $311. The candle would have stepped up in the FIB Fan and thus held above $281. However that did not pan out with the sell pressure encountered near $281.
With March 5th being the BTC Auction day, OKCoin Settlement, and a Full Moon and the closure of a positive Astrological window I did not touch the market today after washing my hands of a position at $282. Once March 4th ended in Beijing the market instantly showed weakness(see chart below) and the astrological forces made it clear price would be effected negatively.
BTC needs to breakout above the 2 red lines in the chart above (the sloping breakout resistance, and the $281 FIB resistance) to attract an major buy volume.
Yesterday’s article started with “…chartists would be thinking a pullback is looming…”. That most certainly did happen with price pulling back to the bottom of support on the FIB Fan from yesterdays chart (see chart below). If the current bottom holds Elliot Wave chartists would expect a rebound to about $31x.00 and needing an open and close above the current FIB resistance.
Yesterday’s article later said ” A couple of lower time frame open and closes under $281 will allow the bears a chance to sink their teeth in though. Trade the break outs,…” As seen in the chart above BTC has fallen back under that major resistance. That level (about $281) is the main force holding the price back from going to $311, 334, and then 442.
This rally is feeling a bit long in the tooth and it might have to be an April rally, at the earliest, before any lofty targets can be challenged.
***However, if on this next prolonged retrace we fall back under the long term support then a new fractal, which is a continuation of the last three, will likely take the price to sub $100. This auction top has the market pivoting at the key 281 FIB line. Chances are the 2 stark realities are $442 or -$100BTC. Polar opposite forces are battling at the $281 FIB level on the 1D chart.
Elliot Wave chartists would be thinking a pullback is looming with a drive up $300+ on the day of the BTC auction. People using FIB analysis would have to look at the current retrace from the breakout at $281 high on their radar. Price spiked into the sell zone box on the last spike, so there is a larger possibility that some time near the auction maybe a double top unless there is a good news story that comes out post-auction.
For now the trend is still your friend, though the price is currently dipping after a strong move upwards. A couple of lower time frame open and closes under $281 will allow the bears a chance to sink their teeth in though. Trade the break outs, have fun, because it sure is nice to have the price near $300 and not $200 for a change.
BTC price has encountered hard resistance at the 23% FIB line from the last market low&high. The FIB fan has provided some decent guidance on this move. The bears want the above price projection of about $300 on the day of the auction to go short again. The bulls will want to make an attempt at a double top to keep a this longer term wave alive (eg 1Day and 3Day chart time frames).
The 1W StochRSI is very close to piercing into overbought territory. Logic would dictate enough strength in price to allow the 1W to enter, and eventually close the week, “overbought”. We used a Line Tool to buy the breakouts starting at $170, about a week ago when the price popped up over our last resistance we suggested using the FIB Tools. As seen in the chart above the price has met strong resistance at FIB levels. After the 1W crossing into overbought we would suggest using FIB tools for both bull & bear-ish directions, and emotionally move away from the cautious bull mode.
In our last few articles we have been examining the possibilities of a bull market. The 1D indicators were fairly bearish a number of days ago, though the 1W was bullish, and the large amount of shorts tipped us off that we could expect a short squeeze. We did get that squeeze and the 1W has continued to stay bullish. The last article stated a need for an open on today’s 1W candle switch over higher than $240. BTC opened above that today and the StochRSI is still heading to the overbought zone (see chart above).
The chart below is from the previous BTC article. It is important to point out how powerful a simple Line Tool is. In a world of endless indicators the best way to have confidence in a bull or bear trend is confirmation of a break above or below a major trendline. What is VERY important to remember is that the last 2 times the 1W approached overbought the market top occurred. More good news will be need to push this higher, but for now it is nice to see price up and over a resistance trend for a change.
The market top from the last major wave,($475), helped extend the sloping resistance from the 2 previous wave tops (Nov 2013 & Jun 2014). The white box to the far right of the chart marked “C” is a key open above resistance. If the 1W candle can open in the 240’s there is a strong chance of a short and powerful bull cycle will play/be playing out.
Boxes labeled A, B, and C have in sequence challenged, and then opened above, resistance levels. I would suggest moving towards FIB focused TA and use less of the Line Tool (which is my favorite when doing TA on long term levels). There is a couple of strong astrological days in early March (3-5th depending on time zone) that would provide a focus if yesterdays action is not undone.
There was a nice bump in price towards settlement this evening that broke a long term resistance level. Though the 1W MACD has turned green, BTC needs to open above the break in resistance (see chart below) when the 1W candle switches over in 3 days from now.
If that happens there is a strong probability price could spike through the upper MA (see chart above). Many indicators on the 1D charts were pointing towards a sell off if a bump in price did not occur. That did occur today. It seemed to be shaping up as about 12hrs before settlement and I tweeted “1D looks like ass, thus a squeeze to smash yolo shorts can happen.” The shorts certainly did get shaken out. The new momentum must continue, or at least go sideways, to turn the 1D indicators into the bullish case the 1W chart has not ruled out. If the momentum can not continue the lower support on the 1W will be tested again.