BTCUSD Hidden Bullish Divergence Predicts Uptrend

BTCUSD has been finding a bottom over the last couple of days and it has been really choppy but we have gotten to a point where I feel about 90% confident that we will see a reversal and an uptrend. Just to make this clear: and UPTREND is not a BULLRUN. We face major overhead resistance at the blue line on the price action. That blue line clearly showed the hidden BEARISH divergence that predicted this dump and now the hidden BULLISH divergence is predicting an uptrend. Once again a primer:

Normal Divergence (Trend Reversal)
Bearish: Higher highs on price action but lower highs on the indicator
Bullish: Lower lows on price action but higher lows on the indicator
Hidden (Trend Continuation)
Bearish: Lower high on the price action and higher highs on the indicator
Bullish: Higher low on the price action and a lower low on the indicator

The red lines on the RSI and MACD make it clear we have a higher low on the price action and a lower low on the indicator. The 12H MACD is about to have a bullish cross and this is occurring as the RSI is bouncing out of oversold conditions. This suggest we will continue upward. Here is the battle between the bears and the bulls, as the recent top was defined by hidden bearish divergence (in blue), which suggest continuation downward. To a certain extent we fulfilled that condition, as current low is lower than our last low. The hope now is this uptrend will set a higher high than $8,500 without having any bearish divergence of any kind as we approached the resistance line in blue. If we do get above the blue resistance line without hidden divergence we can consider upgrading the uptrend to a bull market, but we will still have to be wary of any retracements, of course.

I tried to get an entry earlier today and the whipsawing of the action got me stopped out. I thought I had loose stops but as the price whipped after the false break out and dipped down to $6200 I basically gave my money way for free. This is not the time to take your margin equity to the limit and get margin called as we figure out we are reversing. Not financial advice, so forth and so on.

I have linked 4 ideas and that will hopefully show well the conflicting forces at play when it comes to attempting fundamental analysis in conjunction with technical analysis on the crypto market. My global bias is bearish due to quantitative tightening and the trade disputes occurring because of that QT (but I feel most will personalize the various nations just attempting to position themselves well). Going against my global bias is the fact that recent research indicating Tether is responsible for about 50% of BTCUSD and about 66% of alt coin valuation.

I personally don't see why crypto would be a fiat alternative during quantitative tightening so I would consider most of any price increase during QT due to the well researched issues with Tether. If you have a contrary explanation please let me know.

Commentaire:

We continue to chop sideways and we see the rough makings of an inverted head and shoulders. The volume profile is suppose to confirm the head and shoulders pattern and we see in green the areas where that was done neatly. The red question mark injects some uglyness into our inverted head and shoulder pattern as it seems we squirted up a bit too soon and fell short, then we chopped sideways until we reached the neckline. So, on one hand we had the clear interest in moving back up and we were able to keep those gains as the left shoulder was deeper than the right shoulder by about $10. On the other hand the move up isn't textbook.

Buttressing my by bullish outlook (at least for a swing trade) is the strengthening of the RSI since the 7th, the Hull-MACD appears to be swinging up strongly and we have a potential rising support for the MACD to test.

Things to look for are the RSI to approach or exceed 70/overbought conditions on the hourly as we approach the neckline and the supports on the RSI and MACD to stay strong. Using support and resistance on indicators is a bit looser than with normal charting (and that isn't an exact science either. We are still looking for us to perhaps chop sideways but we should not have this right shoulder chop below the left shoulder, that negates the pattern real quick.

Commentaire:

Trade fermée: ordre d’arrêt atteint:

Stopped triggered when we hit the left shoulder.