Bitcoin (BTCUSD) (3-day / 8-hour Comparison)
Bitcoin remains on the back burner it seems, with an overall sideways movement as more attention is pointed towards ETH and alts in general.
These periods of “chop” for BTC can be maddening for traders who trade primarily Bitcoin, with or without leverage. Although it may seem sluggish, when we zoom out for a glance at the 3-day chart, we see price action that is clearly bullish, as levels we’ve been monitoring for weeks are being tested, broken through, and retested to confirm support where there was formerly resistance.
Further evidence on the 8-hour chart shows the Fibonacci retracement range looking more and more like a failed breakdown/reversal. You can see our “neutral” zone was tested with a weak rejection, broken through to the upside, and retested from above, which was answered with a strong show of support. What all this means is that Bitcoin is grinding upwards, in a seemingly erratic fashion if you are not zooming out. When we zoom out and examine the important data – candle closes and reaction to significant levels – it’s clear that King Corn is gathering its strength before another major move.
As we approach a key zone, traders must watch for bullish confirmation or merely an optimal-trade-entry for a bearish swing trade.
If we see a swift rejection, we could be looking at this fib range resolving in further downside rather than the current appearance of a failed breakdown. If $60-$63k is met with massive selling, and $56k support doesn’t hold, we could be looking at the low $40k area.
No scenario is off the table, and anything could happen, but these higher timeframe charts appear to be showing a lot of resolve for Bitcoin bulls at this point.
Ethereum (ETHUSD) (3-day / 8-hour Comparison)
ETH has been on an absolute tear. While BTC was triggering stop-losses and panic sells, ETH has held strong at the previous highs and continues to climb.
The more macro view of the 3-day chart appears to be just warming up, while the smaller range on our 8-hour chart shows some targets and potential short-term tops on the horizon. Even on the range of the 8-hour chart, the price action around levels of significance tells a story of a massive breakout that has been earned:
- Two visits to the “OTE” range (green box), one before and one immediately after the “fakeout level” rejection at our $2608.53 red line.
- Both with very strong shows of support there.
- From the second bounce at the $2k area, we commenced the breakout from consolidation into expansion.
- The current level of resistance aligns perfectly with a common “pausing” level fib extension.
Bulls want to see some of these lower fib levels retested with a strong show of support while bears watch closely for support to fail. If buyers show up at $3,034, $2,929, $2,713, and $2,608, that would be a real show of strength and further upside would seem likely. Any lows below $2,608 could mean this range is a failed breakout, and we could see some harsh retracements, not only in ETH but alts in general.
Fundamentals & Correlations
Could it be? Is this real life? Do I see Bitcoin dominance at not just <51%, but at 48%?!?!
This is it folks – the conditions of lore, the time of maximum opportunity, where everyone feels like a genius for holding onto their losing bags for years……
Seriously though, this is a big deal, this doesn’t happen often. Things could get very intense for a brief window here. 3 and 4 digits % daily gains can happen, for a time at least.
Historically, these windows last only a few weeks, and the opportunities to multiply your capital seem to pop off every hour, or even more frequently. Hold on, pick some coins, and take profits.
If things do begin to explode upwards across the board, just remember that it won’t last forever. Your profits aren’t real until you realize them by selling. Many people in 2017 held onto their bags and watched their huge gains fall all the way down to their entry point and below – don’t let this be you.
The US Dollar Currency index is more or less at a standstill, and not much has changed outside of last week’s candlewick (the low) respecting this yellow diagonal support. Even so, it’s not much of a reaction, and there’s little to be drawn from it in terms of actionable data.