10/11/2018/11:00CET
Let's do a quick look at where BTC stands right now...
We trade at 6350 at press time after retracing from 6540 highs on the 7th nov.
We had poked out of the short term wedge pattern around the 4th and it is not surprising that the rally of the ensuing days petered out and we now have the support test of our descending wedge resistance line. If this shows support today/tomorrow, then we have a very positive setup.
We often see how the 200dma is a very powerful trend indicator. All one needs do is look historically in #bitcoin daily charts and see how #btc interacts with the 200dma.
I, and most TA guys have often said and repeated that getting out above the 200dma is the real sign of trend reversal.
I still wholeheartedly believe this.
The reason I bring this up is that as this bearish sentiment has prolonged into autumn, all the while that 200dma has retracted lower and lower. Today it sits at 7036usd!
That is only 680usd away or 10.7%. In general we have very close proximity to all the moving averages now. This creates the conditions where a lower intensity breakout can breach them, and breaching moving averages has a self fulfilling prophecy effect when it comes to TA based trading strategies and also algo traders.
Prognosis
I want to see bitcoin retrace further as this wedge intersects. I do not want to see it peirce the asending trendline but a bounce at the intersection at 6280usd during next week would be very healthy development.
A retest of the trend line will be a strong confirmation of its support supplying us wiht a nice spring board for the next leg up.
I see next resistance at 6800-7100 where we meet a significant support/resistance level and the 200dma.
Again the lack of volumes prevents us from getting too bullish at the current moment. Though volumes can change rather quickly when sentiment changes.
The bearish outlook would see us punch through the 6280 which is about our asending trend line and challenge our market structural support at 6k.
Since Feb this year, we have had 10 bounces off the 6k level. This is a very significant level now for BTC.
I expect that under it sit many stop orders ready to sell if we have a breakdown.
If I put my conspiracy theory hat on, then I would expect that there are some wall street whales hoping to get another buy opportunity under 6k and they may test the waters to push down the price and trigger some of these stop loss orders to pick up some discount BTC.
Off course they would contend with all the dip buyers ready to snap up btc at the sub 6k levels. We have seen these buyers step in on repeated occasions and defend 6k.
So we are left waiting for a sign!
As always guys, leave comments, have fun and trade safe.
