Yesterday's piece was about how deep is the dip in Bitcoin (BTC) going to be. The answer to that question this morning is deeper than we thought. Looking at Bitcoin (BTC) on BitMEX, we see that volume analysis has been a useful tool at predicting extremes for XBT. When using volume analysis, a zone that has substantial volume can act as support and resistance. Also, zones that have very little or no trading volume can sometimes act as support or resistance. The phenomenon is mostly psychological.
We noticed that when Bitcoin (BTC) was above 10k, a high volume zone acted as resistance and stopped Bitcoin (BTC) from rising. In the current environment, we noticed that Bitcoin has returned to a high volume zone near 8150. The bottom of the high volume zone is near 8k.
To round out the analysis, other levels below the market that show up from the study are 7500 and 6500.
Bottom Line: We know the Elliot Wave community is looking at a downside at 6500. Their method has been hot all year. We do not necessarily agree with the 6500 target, but we have been neutral on Bitcoin (BTC) and more focused on alts. We continue to believe that a much bigger Bitcoin (BTC) rally may be a late 2019 or early 2020 phenomenon.
We noticed that when Bitcoin (BTC) was above 10k, a high volume zone acted as resistance and stopped Bitcoin (BTC) from rising. In the current environment, we noticed that Bitcoin has returned to a high volume zone near 8150. The bottom of the high volume zone is near 8k.
To round out the analysis, other levels below the market that show up from the study are 7500 and 6500.
Bottom Line: We know the Elliot Wave community is looking at a downside at 6500. Their method has been hot all year. We do not necessarily agree with the 6500 target, but we have been neutral on Bitcoin (BTC) and more focused on alts. We continue to believe that a much bigger Bitcoin (BTC) rally may be a late 2019 or early 2020 phenomenon.
