Sunday, 11 March 2018

Bitcoin: After a Crash Comes a Melt Down ?

Well, the title is a bit dramatic. Do take note of my question mark at the end. All that the prices have been doing since the top in 16 Dec 2017 is staying within the purple falling channel (calling it anything you like: crash, correction, down trend, just a little drop in price). That's not important. What is important is the chart. Let it speak for itself!

As i stated in my previous post Bitcoin: More Pullback to Come After Failing Breakout that i sold my Bitcoin after it developed
1. A double tops.
2. Failing to break above the purple downtrend channel.
3. Break downs from both the price and RSI trend lines.
Any one of the 3 technical resistant above would be enough to justify a trade exit. If they're 3, get the hell out ASAP!

Bitcoin price chart showing double tops, and break downs

I laid out a few scenarios and said that the 200D MA would lend support. As of right now (as i'm writing this), the support has failed. I also said that there's no need to speculate. We just need to wait and see. As always. We should read the chart and let it tell us where it's heading.

Bitcoin price chart showing double tops, and break downs
(Click chart to enlarge)

Now that it drops below the 200D MA, the next logical target would obviously be the previous low of ~$6800 (or Scenario 3 in my previous post, and marked by "A" in the above chart).

And if that fails, the next logical spot would be the bottom of the purple falling channel (marked by "B" in the chart). It should at least does a bounce from there. How high is that bounce? Or is this THE bottom? It's simply too early to say.

One more note, the recent volumes are above average. So this down move is to be respected.

Needless to say, after having sold it on 6 March (the day i published my previous post), i haven't bought it back. I'm still in the wait and see mode.

Remember, the price can turn around right now after breaking support. Although i don't think so. It's also possible that it turns around just above "A". Again, no need to jump to any conclusion. Just wait and see.

In trading, most of the activity should be doing nothing. Well, it's nothing when it comes to placing an order. But watching and analyzing isn't really doing nothing. It's actually what trading is all about: study, wait and see.

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