What happened to all of the HODL'ers?!
Thank you 
What many have been fearing has become a reality....the bears have awoken early from hibernation and are currently winning the battle.
Price action fell through my lower support trend line (yellow) and it fell hard. So convincingly, that it quickly dropped down to the S3 support fibonacci pivot level. Luckily, the RSI showed an oversold signal and price seems to have found a decent support level here at the S3. This support level also coincides with the S1 support level on the daily chart as seen below.
If we fall through the S3 level on the 4 hour chart, which coincides with the S1 on the daily chart, then we may be in for another leg down to the S2 level on the daily chart. This price level is right around $7,250.
Enough of the pessimism! Where are the bulls?! When does the party start?!
In order to figure this out, we must revisit the 4 hour chart below.
In order for the bulls to get running again, they have many battles to win against the bears on this 4 hour chart. Remember that all lines of support in the past become lines of resistance in the future when the price tries to rebound. With that being said, these are the things we must see happen:
- Re-test the S2 level, which now acts as the first line of resistance.
- Upon breaking through the S2 level, the bulls must re-test the S1 level. While re-testing the S1 level, they will also have to fight through the previous support trend line (yellow).
- As the bulls fight their way through they must also contend with the 20 and 50 day moving averages. As these will begin to weigh price down as time moves on.
- Lets say that the price is able to claw its way back through all of this resistance. There is still the upper trend line (yellow) that we would need to break through before I would become even slightly bullish.
For the sake of technical analysis I would like to mention a critical spot on my four hour chart, which is February 4th @ 8pm.
If price were to reach this level, then it would be safe to say that the above mentioned resistance will have been broken and we can start to have a more bullish outlook. Will this happen?
I would encourage you to follow my page to find out.
Price would need to be at or around $10,500 on February 4th at this time. Please note that price could easily bounce off this point and turn bearish again. However, notice the ichimoku cloud just above this point. If we see price close above that, then we will know the bulls are gaining some steam. By this time, we will also have a new set of pivot points to work from for further analysis.
If you find my analysis useful, then please follow my page and ask questions or leave comments. I would be more than happy to assist with ANY questions or concerns that you have.
LEGAL DISCLAIMER
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.