I wrote an article just yesterday in which I suggested a target of $1,000 was on the horizon for bitcoin. Taking my own advice, I went long as a result of that analysis. However, I have since closed that long position as a result of subtle indications on the 2 hour chart that support might be failing.
As you can see, when price fell, price bounced odd the 2nd arc and re-entered the sphere of the 1st arc. The arc provided support for several candles. This was the bullish event that led me to believe that another bitcoin rally was likely beginning. However, at the red arrow, the 1st arc failed again. This is not something I would expect if a rally was about to begin.
There is more reason to question the assertion that a rally to 1,000 is nigh. Here is the same 2 hour chart, with a setup from the previous swing high.
Here you can see how the 3rd arc pair has supported price ever since the panic low. But I see that price has clearly entered the arc pair and could arguably be working its way through it. If this is the case, then a drop could be on the horizon, as soon as the arc is cleared.
Taking a look at the 8-hour chart:
Here we see an indication that a lower high may be unfolding, as price is apparently being turned away by an Andrews Pitchfork resistance line.
Putting all these clues together led me to close my long position, and motivated me to write this article a day early. I personally intend to watch from the sidelines for a bit, until this market clearly indicates the direction it intends to go.
Happy trading!
Remember: The author is a trader who is subject to all manner of error in judgement. Do your own research, and be prepared to take full responsibility for your own trades.
Image from Shutterstock.
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