Wednesday, 10 January 2018

Bitcoin Downtrend Continues

While the head & shoulder pattern that i detailed in my previous Bitcoin post Bitcoin Head and Shoulder and Fib Retracement Targets didn't play out fully, nevertheless, its downtrend is clearly in place.

The chart shows lower highs and lower lows; that's the definition of a downtrend. Actually just a look at the purple channel in the chart should convince you.

Bitcoin price chart showing downtrend
(Click chart to enlarge)

While the H&S pattern didn't play out fully, some of the targets i mentioned in that post would still be valid.

 Possible Trades 

The more prudent traders (position traders. Are there such traders in Bitcoin space?) may want to enter the trade on the long side when prices are turning from lower lows and lower highs to higher lows and higher highs.

The more aggressive traders (swing traders, that's me) would entertain to enter the long side when prices break above the UPPER downtrend channel (as represented by the purple channel in the chart). I may wait for a day for 2 after the breakout.

The most aggressive traders (short-term or day traders, that's not me) would like to enter the long trade when price tests the LOWER channel and trade the channel's bounces.

So far, the 50 DMA is providing strong support. If - i would say when - this support breaks, the 100 DMA (shown in green) and my lowest target (that i described as "confluence of 3 levels) in my previous post (in the link above) are still sound targets.

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