BitcoinShort
BITCOIN Bulls on Parade! When Will We See the Short-Term Peak?
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COME WIT IT NOW!
What a beautiful few weeks in crypto, with the recent Bitcoin rally providing a bull market for the entire market space. This played out just as expected after I called BTC's bottom. From the time that idea was published on April 6th to the close of the 24th, Bitcoin went up $2849.92 (+41.94%) on Coinbase. Heck, even if you waited until my comment update on the 12th, when I claimed "we have enough evidence to suggest it's time to BUY," the price increased $1770.10 (+22.48%). Not too bad for my TradingView debut.
I've now put the pressure on myself to keep providing proactive ideas that can ALERT readers when to BUY or SELL. As most involved in technical analysis knows, not every idea can be a winner. But let's just say I want to stay on top of the mountain longer than The Giant did after he won the WCW Championship in his debut match at Halloween Havoc 1995. I simply must follow up my first call with another winner.
With that mind, I'm not here to call anything just yet, but we do have some interesting business brewing. Therefore, I want to assess a potential SELL call for the short term.
The $700+ dollar increase from the 24th pushed the daily RSI (69.6653) to fringe "overbought" territory. Once/if the RSI actually surpasses 70 at the upcoming close, we will be on ALERT to SELL. The question in response to that is: When should we actually sell?
The answers should be supported by simple, yet effective indicators. Last time, when I successfully called the bottom, I used two factors: (1) a pink trendline channel that connected two previous lows to estimate the resistance range for the early April bottom, and (2) a regression trendline that accounted for the price action between the September 2017 low and the Easter 2018 low. These were effective indicators, because they fit into the context of the foundational upward trend for Bitcoin. Given the fundmentals of blockchain and the increasing institutional participation in crypto markets, there was no reason to consider BTC down and out on a long-term basis. All other claims were just noise.
[BTW, you can still see these two trendlines, although the pink trendline channel now accounts for the 6.4% volatility at each daily price point, meaning the channel gets wider for future analysis.]
This case might not provide an easy answer, but let's look at a few notable possibilities:
> The 200-day volume-weighted moving average: This indicator accounts for volume, which I think is the most-effect MA indicator in for the volatile crypto market. The present-day VWMA(200) is $10192.54, which requires nearly a $550 increase for today's candle.
> The prorated highs on 2018-03-12 and 2018-03-21: This indicator is prorated to have a slope parallel to the pink trendline. These two lines account for a $20.14833 increase after each close. The March 12th high will prorate to $10836.97 by April 28th, while the March 21st high will prorate to $9939.64.
It's important to note that securities with a 70+ RSI don't immediately regress. The security's price often continues to increase until either the buy volume climaxes or the overhead resistance approaches. We cannot predict the former, but we can predict the latter, hence the three proposed possibilities.
You can see that the VWMA(200) sits in between the two purple trandlines. Because moving averages are more popular and effective indicators than prorated previous-high trendlines, you can consider the two trendlines to be the upper and lower bounds of the VWMA-based resistance zone, at least for the time being. I'm sure the next few days will give us more answers, which is why I showed the prorated prices for the 28th, as opposed to today.
Keep your eyes peeled over the next 72 hours. It might be time to short-sell Bitcoin soon!
What a beautiful few weeks in crypto, with the recent Bitcoin rally providing a bull market for the entire market space. This played out just as expected after I called BTC's bottom. From the time that idea was published on April 6th to the close of the 24th, Bitcoin went up $2849.92 (+41.94%) on Coinbase. Heck, even if you waited until my comment update on the 12th, when I claimed "we have enough evidence to suggest it's time to BUY," the price increased $1770.10 (+22.48%). Not too bad for my TradingView debut.
I've now put the pressure on myself to keep providing proactive ideas that can ALERT readers when to BUY or SELL. As most involved in technical analysis knows, not every idea can be a winner. But let's just say I want to stay on top of the mountain longer than The Giant did after he won the WCW Championship in his debut match at Halloween Havoc 1995. I simply must follow up my first call with another winner.
With that mind, I'm not here to call anything just yet, but we do have some interesting business brewing. Therefore, I want to assess a potential SELL call for the short term.
The $700+ dollar increase from the 24th pushed the daily RSI (69.6653) to fringe "overbought" territory. Once/if the RSI actually surpasses 70 at the upcoming close, we will be on ALERT to SELL. The question in response to that is: When should we actually sell?
The answers should be supported by simple, yet effective indicators. Last time, when I successfully called the bottom, I used two factors: (1) a pink trendline channel that connected two previous lows to estimate the resistance range for the early April bottom, and (2) a regression trendline that accounted for the price action between the September 2017 low and the Easter 2018 low. These were effective indicators, because they fit into the context of the foundational upward trend for Bitcoin. Given the fundmentals of blockchain and the increasing institutional participation in crypto markets, there was no reason to consider BTC down and out on a long-term basis. All other claims were just noise.
[BTW, you can still see these two trendlines, although the pink trendline channel now accounts for the 6.4% volatility at each daily price point, meaning the channel gets wider for future analysis.]
This case might not provide an easy answer, but let's look at a few notable possibilities:
> The 200-day volume-weighted moving average: This indicator accounts for volume, which I think is the most-effect MA indicator in for the volatile crypto market. The present-day VWMA(200) is $10192.54, which requires nearly a $550 increase for today's candle.
> The prorated highs on 2018-03-12 and 2018-03-21: This indicator is prorated to have a slope parallel to the pink trendline. These two lines account for a $20.14833 increase after each close. The March 12th high will prorate to $10836.97 by April 28th, while the March 21st high will prorate to $9939.64.
It's important to note that securities with a 70+ RSI don't immediately regress. The security's price often continues to increase until either the buy volume climaxes or the overhead resistance approaches. We cannot predict the former, but we can predict the latter, hence the three proposed possibilities.
You can see that the VWMA(200) sits in between the two purple trandlines. Because moving averages are more popular and effective indicators than prorated previous-high trendlines, you can consider the two trendlines to be the upper and lower bounds of the VWMA-based resistance zone, at least for the time being. I'm sure the next few days will give us more answers, which is why I showed the prorated prices for the 28th, as opposed to today.
Keep your eyes peeled over the next 72 hours. It might be time to short-sell Bitcoin soon!
Note
2018-04-25, 8:35am ESTTalk about impeccable timing!
Literally within minutes of publishing this idea, Bitcoin took a regressive fall. As you can see after loading this page, BTC was at $9704.20 at the time of publishing, which was between 10:30pm and 10:45pm EST on the 24th. (You'll know this was the time frame, based on the 15-minute chart shown below. There are literally only two candles that reached 9.7K, and I remember BTC peaking just after I published my idea.) It briefly peaked at $9763.49 before tumbling down to as low as $9020.82, marking a 7.6% decrease.
Regression certainly delivered, of which I was totally correct. But this happened before the three proposed sell points were even approached, of which I certainly did not foresee on a proactive level. Less than 30 minutes isn't enough time to set up an ideal sell! But if you ended up having the deft hand to short sell and buy back, then plaudits are in store for you.
So now the question is: Will this dip be sustained? There's not much substance to go on just yet, but I suspect the bulls aren't quite finished. If anything, this gives more time for Bitcoin to climb up and break through the 70-level on the RSI.
Note that today's low has yet to drop below yesterday's open. Also note that yesterday's trade volume (20.842K) was considerably lower than the April 12th boom (30.544K) that got BTC out of my pink trendline channel. That's at least two small signs that yesterday's bull parade hasn't been completely erased, and that there are more fireworks to come. It's entirely possible that this was just a climactic moment, not the final climax of this month's run.
Your best window for a multi-hour trade already passed by, but the time for a multi-day trade is not here yet. We may still get to my proposed sell points. Just keep monitoring BTC's progress in the mean time.
SNAPSHOT:
Note
2018-04-25, 4:00pm ESTTo update quickly, today's low has now dropped below yesterday's open. Also, today's volume is 27.116K, which is about 90% of the April 12th with approximately four hours left in the day.
Those favorable signs of a potential bounce back are now gone. It's now more like a 50-50 possibility that BTC saw its short-term peak yesterday.
I'll keep updating my thoughts as the market sees fit.
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