Here is a link to TradingView for anyone who wants to get a better view of the charts.
Hello, fellow crypto enthusiasts! First, I really appreciate you taking the time to check out my chart analysis.
So BTC has once again re-tested the 2018 low and once again it has held. The important question here is how long can this lower support level hold up? It is very possible we may find out the answer to that question very soon.
On July 31st I published an idea that included three charts representing three different scenarios for BTC, one was bullish, one was neutral, and one was bearish. Unfortunately, this idea was hidden by TradingView because I violated the house rules (I included links to my website and store), this is only allowed for those with a premium plan (I have the Pro plan).
Anyway, in this published idea the bullish scenario was that BTC had broken out of the top of the descending triangle it has been forming for many months and was now pulling back to re-test the upper triangle trend line. Unfortunately, this scenario was invalidated because the price of BTC did not bounce and kept dropping thru the upper trend line.
The neutral scenario (Chart above) was that BTC has started trading in a consolidation channel ($6000 to $10,000) which started back in March. There is no telling how long this could continue, it could go on for many more months or it could end very soon with a break out above the upper trend line. During the 2014 correction, BTC spent about 10 months in a consolidation phase (the middle of January to the beginning of November). For this scenario to be validated BTC would have to continue trading in this channel. A break down lower to new lows or a breakout higher above the upper trend line would invalidate this scenario.
The bearish scenario (Chart above and the chart at top of the page) was that BTC has not broken out of and in fact still trades within a descending triangle. Because a descending triangle is usually a bearish continuation pattern, the move higher that BTC made back in July was nothing more than a move to the triangles upper trend line. You can see from the chart that the price did in fact move up to the upper trend line only to fail to break through and subsequently dropped back down to the lower support level. For this scenario to play out further I would expect a continuation of trading within the triangle or a move from here down to the lower trend line again, and possibly a break below the trend line to new lows. If instead Bitcoin pushes higher from here and breaks out above the upper trend line, that would invalidate this scenario.
Of the three scenarios I wrote about (Bullish, Neutral, Bearish), I believe that only the neutral and bearish are still valid. My hope is that we are in a neutral consolidation pattern (channel) and the lower support keeps holding, however, I still thing that there is a strong chance that the bearish scenario plays out. If I remember correctly descending triangles typically break down at about 2/3 of the way from the left side to the apex which is about where BTC is now.
It should also be noted that it looks like BTC may be forming a head and shoulders pattern right on the lower support level. I should also say that I didn't spot the potential head and shoulders pattern it was Joey Rocket of Joey Rocket Cryptos or Team Joey Rocket who brought it to my attention. I want to also say that Joey provides tons of great information about cryptos and for anyone that wants to check him out, he is all over social media (Twitter, YouTube, Steemit, Discord)
I am trying not to be too negative here, there is a chance that even if BTC is forming a descending triangle it could still break out of it to the upside. There are some instances where this does happen, especially the longer the lower support holds and the closer the price gets to the apex. The longer this goes on the shorts lose hope of pushing it down any lower, it's all about psychology. Chances are as the price moves closer to the apex more and more shorts will most likely pile in but if they cannot force the price to break support, because there are an equal number of buyers at some point they will give up and cover which will cause a quick and extremely powerful bullish move.
Again, I really appreciate you taking the time to check out my charts/analysis and hope you all have a great weekend!
Until the next blog post, Take care!
Questions or comments? Email me at firstname.lastname@example.org
Also if you get time check out the new BigskyCrypto store: https://bigskycrypto.store
It is still a work in process so check back as I will be adding a lot more merchandise.
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I will be using any proceeds from the store to offset the costs of materials and advertising related to my blogging, my website, my Patreon page, and my steemit page.