What’s up traders,
Let’s start off our price analysis looking at the daily chart and plotting the 9 and 18 day EMAs. These two EMAs are tools that institutions and smart money use to measure the overall trend. When the longer term EMA (18 day) is on top of the shorter one (9), this signals a bear trend, and if the daily chart is showing signs of being bearish, it is something that we must take into consideration. If the higher time frames point down, that’s going to be important information to trade with on the lower timeframes. Furthermore, we can see that the EMAs are “stacking”. Stacking refers to the speed and strength at which two EMAs separate from one another, and is a way to see heavy selling coming into the market. Using these two tools on a daily chart can dramatically help you stay on the right side of the trend.
daily bitcoin EMAs
Next, let’s look at some key price levels for bitcoin. Key levels are going to come from higher timeframe charts like the daily.
Bitcoin’s key daily price levels
We can see that 230 has just been broken (I went to make breakfast and came back to a huge dump, lol bitcoin). Our 230 support has broken, and we are looking for that to hold as resistance, next stop is 213.8 if resistance is to hold.
Update: Ok, so, bitcoin won’t stop dumping as I am writing. 213.8 certainly looks like it’s in the cards this week.
Moving on, let’s get closer to the action and move to an hourly chart…
The hourly chart paints a bad picture as it looks like every support has been broken. If we put in a local bottom here a retracement to 232-235 (61.8-79% fib levels) may occur, but overall the trend in bitcoin is dangerously down as there are no significant support levels until 213.
Hourly Resistance Broken
It is important to note that given the recent price action and trend, we must be cautious about taking longs in our trading. The market is under heavy selling and we are not looking for higher highs to be made. Any rally is most likely going to be a selling oportunity, so setting up fibs from key swing highs and lows could give great retracement opportunities to be a seller.
In summary:
The daily chart is bearish. Expect the market to favor selling, and all hourly support has been breached. Another key thing to note is the bearish engulfing weekly candle, where the last weeks green candle was fully enveloped by an even bigger red candle.
Now, on the flip side, if we start to turn around and start building a base and making higher highs out of that base, we could look for price to head higher. But for the next couple days, the best bet is to filter out buys from your trading and look to be a seller.
See ya’ll tomorrow with another bitcoin price report.
Good Luck, Good Trading
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