Breaking Bitcoin: Market Update 10-5-18
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BTC/USD Daily Chart:
This is a lesson in caution. A casual glance at this chart might make one desire to jump the gun and go long on BTC at this point in time. I can hear the argument.
'Justin, look, it's a green candle breaking resistance! It's breaking out of the triangle! BTC 20k!!'
Yeah, yeah. Sounds good. Here's the problem though. Resistance isn't broken until you get a candle to CLOSE above resistance. I'll repeat that, a candle needs to actually open and close above or below a resistance level to mark a potential breakthrough. Yeah, potential. Not definitive. The market needs to play out to make something definitive. However, as a trader we deal in probabilities. So if we see a potential break of resistance, that's something we can enter a trade upon. A potentiality gives us a higher probability to predict market turns. However, this current daily candle with a little open flirtation above the resistance line is nothing more than a cock tease. It's nothing real yet, and you'd be an idiot to enter into any trade based upon it.
You can see the last daily candle closed right at the pivot point. Today's candle is flirting with closing above it, and the downward trend line we had drawn that had rejected BTC's continued bullishness over the past week. So yes, I'm open to the potential of continued bullish movement here. However, I'm a trader, not a religious convert. We wait and see what the market does, and react. That's the way to profit in this market. Let's not forget the past year we've been living. What is the number 1 lesson this bear market should have told you?
Answer: When the dominant market trend is bearish, that is, price tends to trend downward regardless of short-term spikes of bullishness, you can almost always buy it cheaper. When you think the bear market is over, you've been wrong every single time. What makes you think this time you're going to be right? Besides, if you do think the bear market is over, then you have plenty of time to hop on the bull train.
Until then, preserve your capital (what little you have left if you've held BTC throughout this year without shorting any...) and trade intelligently.
TD Sequential Analysis: The daily candle is color-flipping, which signals to us to not trade today. Danger, danger Will Robinson. When colors be a flipping, we don't start tripping. We're flipping between a bearish 5 of 9, and a bullish 1 of 9. Either count tells us to be out of this trade. A 5 of 9 is too progressed into the count to be valid to trade, and a 1 of 9 doesn't tell us anything. You have to wait for a 2 or 3 of the same color to trade above or below the previous candle of the same color to enter a trade in that direction. So if you're not in the trade now, stay out.
CC Fisher Strategy: Looking at our in-house Fisher Crossover Strategy, we received the sell signal on Oct 1, when the Fisher first crossed under the signal line, and when price bounced off the downwards resistance trend line for the second time. At this point we haven't received any conflicting signals from our indicator, and using it in a trend-following fashion we can see that the EMA is still bearish, meaning the 55 day EMA is still underneath the 120 Day EMA. Not looking good yet.
Pivots: As stated earlier, price is still trading below the Pivot point. That's bearish. If today's candle closes above the Pivot point, we can view things in a new light. But it hasn't yet. So hold your horses.
Volume: What volume? Bulls are holding price, sure. But there is no indication of fresh meat or enthusiasm entering the market to rally.
12 Hour Chart:
Potential Bullish trade on the 12 hour chart. We do see a bullish 2 trading above a bullish one on the TD Sequential indicator, however I would like to see that correlated with a close above the Pivot point here. This chart looks nearly identical to the daily, it's just progressed one single TD Sequential candle. This could turn around very quickly, because volume is still quite low.
We did receive a buy signal from the Fisher Crossover Strategy, and we did break above the 0 line. However, that doesn't indicate the downtrend is dead. What we need to see is for the Fisher to bottom ABOVE the zero line to confirm a trend reversal. Again, a chart looking like this does not fill me with confidence, and this could turn around at any moment.
4 Hour Chart:
The four hour just told you to get out of your long position. We just had a completed Sell Setup, reaching a 9 of 9. This corresponded with a bearish Fisher Crossunder signal, combined with a close underneath the pivot point. The current four hour candle immediately anteceding this seems to want to buck against these signals, but again, we don't see an established pattern to trade with. The market just gave you a profitable long trade and told you to exit. Perhaps the smartest thing for you to do is to listen to it?
1 Hour Chart:
The one hour is in a no trade zone at the moment. We just price flipped to the upside, giving us a 1 of 9. You can't trade on a 1 of 9. You need a deeper pattern. Again people, this means nothing. In fact, it will probably mean nothing. We also have a bearish Fisher Crossunder as indicated by our custom strategy.
tldr;
Market outlook is still bearish. The dominant trend is still bearish. A daily close above this resistance line and current pivot point which is what we're potentially looking at could POTENTIALLY signal a small rally, however we need to see much more volume to confirm it. Not seeing any of that yet. I don't feel confident in any trade on any time zone, however to each their own.
Price Predictions:
Bullish:
Ta get 1: $6782
Target 2: $6900
Target 3: $7091
Bearish:
Target 1: $6402
Target 2: $6283
Target 3: $6092
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I'm not a financial adviser. The information here is for education purposes. Trading and investing are wonderful things to do, and it's OK to take advice and to learn. I'm glad you're here right now reading this, educating yourself. Don't take my word as the gospel, and be careful. All investment and trading opportunities carry risk, I'm sure you reading this have the potential in you to profit from a careful trading plan, and wise investment choices. Do it right, do your research, and don't trade stupid. Very best of luck to you!.