Bitcoin Looking Ambivalent / Slightly Bearish
Let’s start by taking a look at our last Bitcoin Price R/R:
As you can see in the chart above, our trade busted (oh no!).
Let’s take a look at the situation now on the daily resolution for Bitcoin.
Bitcoin Price Analysis
Zooming out on the daily, we can see a massive overhead resistance that starts at the overhead resistance. And when you look at things from this view, it almost appears as if the price spiral for Bitcoin was never broken, despite the massive gains this year (+200% at one point in time).
In the chart above, we can see a reverse BARR formation.
‘BARR’ stands for Bump-and-Run-Reversal, which is a chart pattern that was dissected beautifully by Thomas Bulkowski: http://thepatternsite.com/barrt.html
Below is a picture:
Essentially a BARR can occur when there is an underlying supporting trendline that is then augmented by another support that occurs at a more acute angle than the first (as shown in the picture above).
|This formation lies on the principle that the acceleration of a trend on an already existing trend is a sign of market conditions that will accelerate bullish/bearish exhaustion at some point (dependent on the direction; uptrend = bullish||downtrend = bearish).|
As one can imagine, the Reverse/Inverted BARR is simply the opposite case scenario from what we can see in the picture above from Stockcharts.
The picture above mimics what we can see with Bitcoin on the daily (to some extent):
Overhead Resistance for Bitcoin on the Daily Resolution
Assuming that Bitcoin bounces off of the underlying support at $8k-$8.2k and continues its path upward, $9.4k would be the most potent overhead resistance. This is dictated by the most recent overhead downtrend resistance (from August 6th, 2019 and onward), as well as an established horizontal resistance/support point that has been longstanding for Bitcoin too.
Exponential Moving Averages For Bitcoin on the Daily Resolution
Its been a long time since these have come in to play, but let’s take a look.
It appears that the price for Bitcoin has definitively fallen below the EMA-50 on the daily resolution.
Let’s check it out below:
Good news, at least, is that the overhead resistance that will be posted by the EMA-50 is at $9.7k currently.
Unfortunately, the EMA-200 poses as overhead resistance at $8.7k, which isn’t too far above where the price is currently:
Below is a chart with the EMA-9, EMA-26, EMA-50, EMA-100, and EMA-200:
From the chart above, we can tell the following:
- The EMA-9 is directly overhead. While this is not a strong overhead resistance, it is definitely one to take heed for bulls.
- The EMA-200 is not much further above at $8.7k, indicating that there may be significant resistance on the price’s way to $9k.
- EMA-100 crossed above the EMA-26, which is also pretty bearish.
Overall, the EMAs don’t show a favorable ride for Bitcoin moving forward on the daily resolution.
Leading Indicators + Reversion Ribbon
- Zerononcense Reversion Ribbon (custom) = The histogram here shows us convergence. The ribbon is just below the histogram (zero line) as well. Crossing above would be bullish. The ribbon has not became green yet, however, so this just shows us the momentum headed in the other direction — but no definitive buy signals have been emitted as of yet.
Volatility RSI (custom) = We can see the line has transformed from blue to red and it is also headed upward from the bottom of its bounded range (similar to RSI’s overlay). This tells us that the price is exhibiting: A) increasing volatility + B) bullish momentum Keep in mind that there is not a lot of data behind this + not enough data to assert that this is a confirmed change in the price sentiment & direction.
- RSI(14) [custom] = Our indicator is still red (sell) ; that means that the EMA(9) of the ROC (Rate of Change) of the RSI(14) is still outpacing the RSI(14) itself [how this indicator was built]. This, plus the RSI(14) itself fails to show us anything to allow us to be palpably bullish on Bitcoin (evaluating the indicator by itself)
- Balance of Power (custom) = We can see increased buy pressure here, but like the Volatility RSI, there is not enough information for us to definitively state that there is a definitive change in the market behavior (i.e., flipping from heavy sell pressure to a heavy, underlying buy pressure)
Volume is Divergent With the Price on Lower Time Frames
Below is Bitcoin on the H8 resolution:
Similarly, on the H4/H12 resolutions, the volume is decreasing as the price has increased (albeit, minimally).
This specific type of negative divergence is an impending sign of price reversal.
Bitcoin = Ambivalent/Bearish Bias
It is possible that there is a bullish undertone for the price, but its just not really detectable at this point in time.
There is no R/R for the time being. We’ll revisit Bitcoin over the next day or so to see if there are any underlying changes in the price action that yields a more concrete reading.
It is possible that the price touches the overhead resistance of $8.5k. But there does not appear to be enough apparent momentum at the time of writing to guide Bitcoin past this overhead resistance at the time of writing.