BTC/USD - Bitcoin Technical Analysis May 25, 2018
Using various Fib retracements and projections at points of major and minor swing waves,
we get confluence of Fib levels to obtain stacked zones of support at retracement and extension levels (i.e., beyond 100%).
The zones with greater levels of Fib confluence, the higher the confidence of those support zones will be.
In the analysis, I am showing three possible outcomes based on the zones of support to give multiple scenarios depending on how
the market moves for Bitcoin. Although three independent charts would be easier to read, I wanted to display them on a single chart
to show the relationships as per the movement through the Fib zones.
The first movement is a reversal at the current price to form a possible inverse head and shoulders.
At the current price, there are no Fib support zones but since it has breached a previously three level
support zone, it may attract back to it or retrace further to the worst retracement zone levels of 78.6% that
are stacked before bouncing to revers in the upward direction. We would then take the distance from the head to
neck-line of the inverse head and shoulders as the length to take profit from the point of entry. If the 78.6%
stacked support zone doesn't hold, then we are likely to see a move to the downside at 127% extension. If the 100%
retracement holds as the previous low and retracement did, then we could see a possible reversal to form a double-bottom
pattern if the reverse to the upside closes above the previous high. We would then take the distance of the most recent
bottom to the horizontal line formed from the current price movement upward intersecting the previous high and use this
distance at a take profit length from the point of entry. The last case would be if the price dropped to 127% extension
after breaching the 78.6% zone of support. As I mentioned before, the 78.6% retracement is the last zone of support that
if breached the more likely scenario would be for Bitcoin to drop to the 127% extension based on historical charting data
of various markets. At the 127% we can see that there is a stacked zone of support which we would most likely see a
reversal occur and a point of entry to go long.
Price Level Points:
Possible lower-low at around 5700 and stacked Fib 127% extension zones
Possible double-bottom at around 6600
Possible neck at around 9800
Possible double-bottom confirmation at around 9800
Take profit at around 13000+
Possible lower-high at around 7300 and stacked Fib 78.6% retracement zones (last resort retracement support)
Possible inverse shoulder 2 at around 7500
Possible Long Entries:
Long entry at the close above the inverse neck or double-bottom confirmation line.
Long entry possible double-bottom point with the Fib stacked zone of support.
Long entry at the possible lower-low at the 127% Fib stacked zone of support.
Possible Short Entries:
Short entry below the 78.6% Fib retracements stacked zone of support.
Short entry at the take profit exit points of either the inverse head and shoulders or double-bottom patterns.
we get confluence of Fib levels to obtain stacked zones of support at retracement and extension levels (i.e., beyond 100%).
The zones with greater levels of Fib confluence, the higher the confidence of those support zones will be.
In the analysis, I am showing three possible outcomes based on the zones of support to give multiple scenarios depending on how
the market moves for Bitcoin. Although three independent charts would be easier to read, I wanted to display them on a single chart
to show the relationships as per the movement through the Fib zones.
The first movement is a reversal at the current price to form a possible inverse head and shoulders.
At the current price, there are no Fib support zones but since it has breached a previously three level
support zone, it may attract back to it or retrace further to the worst retracement zone levels of 78.6% that
are stacked before bouncing to revers in the upward direction. We would then take the distance from the head to
neck-line of the inverse head and shoulders as the length to take profit from the point of entry. If the 78.6%
stacked support zone doesn't hold, then we are likely to see a move to the downside at 127% extension. If the 100%
retracement holds as the previous low and retracement did, then we could see a possible reversal to form a double-bottom
pattern if the reverse to the upside closes above the previous high. We would then take the distance of the most recent
bottom to the horizontal line formed from the current price movement upward intersecting the previous high and use this
distance at a take profit length from the point of entry. The last case would be if the price dropped to 127% extension
after breaching the 78.6% zone of support. As I mentioned before, the 78.6% retracement is the last zone of support that
if breached the more likely scenario would be for Bitcoin to drop to the 127% extension based on historical charting data
of various markets. At the 127% we can see that there is a stacked zone of support which we would most likely see a
reversal occur and a point of entry to go long.
Price Level Points:
Possible lower-low at around 5700 and stacked Fib 127% extension zones
Possible double-bottom at around 6600
Possible neck at around 9800
Possible double-bottom confirmation at around 9800
Take profit at around 13000+
Possible lower-high at around 7300 and stacked Fib 78.6% retracement zones (last resort retracement support)
Possible inverse shoulder 2 at around 7500
Possible Long Entries:
Long entry at the close above the inverse neck or double-bottom confirmation line.
Long entry possible double-bottom point with the Fib stacked zone of support.
Long entry at the possible lower-low at the 127% Fib stacked zone of support.
Possible Short Entries:
Short entry below the 78.6% Fib retracements stacked zone of support.
Short entry at the take profit exit points of either the inverse head and shoulders or double-bottom patterns.
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