Thursday, 19 April 2018

Bitcoin: Breakout of Down Trend

After falling from the ATH of ~$20,000, Bitcoin prices have finally broken out of the purple downtrend channel. For those who have read my previous Bitcoin posts, they're all too familiar with this purple downtrend channel.

Since mid-Dec 2017, Bitcoin prices have been confined to this downtrend channel for practically 5 months. It finally broke above this channel last Thursday (12 Apr).

Bitcoin chart March 2018
(Click chart to enlarge)

I've said in previous posts that if prices break above this downtrend channel into the white space above, i'll buy Bitcoin because this indicates the correction is over.

Have i bought it? No, not yet. When i said i would buy on breakout, that was when prices were found above the rising trend line ABCDE. This trend line has served as support since the parabolic run back in middle of 2017 (marked by 'A' in chart). I've made that clear in several posts, one of them is Bitcoin: This Support Better Holds.

Once prices dropped below this rising trend line ABCDE, this trend line is now acts as resistance. You could see that when prices breakout of the downtrend, it rises strongly, and yet it bounce off at E (instead of rising above E).

Of course, supports and resistances are just that supports and resistances. They can be broken.

For now, i'll continue to wait and see. After all, i've been doing that for 5 months, and did only 1 trade during this period. I can wait a little longer.

Overall, things are looking better than ever since the all time peak. Just like prices fell hard after the double tops (top horizontal green line), it finds strong support at the double bottoms (bottom horizontal green line).

Prices may trap between these 2 channels for a while.

In any case, i continue to sit on the sideline. But the time to buy is neigh.

For the long term holders who are strong believers of Bitcoin, buying now makes a whole lot more sense than buying in December 2017. Don't chase markets, buy when prices are low. Not when people are saying it goes up to a million dollars.

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