Market looks bullish in this chart. We bounced off the 300USD/1900CNY level. Market has been trading at higher levels, but also held there. Past bounces during this bear trend has sold off relatively quickly. It used to starts off bouncing off support quickly, rally some followed by quick dumps. Is it different this time? Chart pattern definitely looks better than before. I covered my shorts and went long yesterday.
Over the weekend, bitcoin market was under heavy selling pressure that we haven't seen since the last bubble. We are inside a big ascending channel on the hourly. Why do I not call this a bear flag, a continuation pattern? This is because the range and volume of the channel are big; the band is over 25 points! A churning of this size suggests that market cannot settle to a fair price at this time. USD exchange traders are trying to find fair value at 300 witnessed by the stamp wall. The CNY exchanges seems to prefer 2000CNY/325USD.
Market is forming a bear flag at the lows after yesterday's drop. How do you know that this is a flag? Read this bull flag post I wrote.
1. Prices overlaps between high and lows.
2. Volatility and volume drops .
More market consolidation. On the hourly timeframe, we are bouncing between the two trendlines. The buying pressure is getting slightly higher at this juncture since we have made higher lows. However, the big downtrend suggests that this could be a bear flag. I've made a post about trading flags before if you are interested. In addition, we have retested this ascending trendline multiple times, 6 total.
This update will have 2 parts, first is the market update, and second is about analysis of my recent trade and mistakes.
Bitcoin market update:
Since yesterday, market has been sliding lower with above average volume, but the volume is much lower than the first wave down. As I speak, we are retesting the lows of the previous low. However, this time, price has been consolidating here instead of the gradual climb from before. Looking at the 4 hour chart, we have broken below the descending triangle and that is bearish even at these oversold levels.
Market is starting to slip a little but still in consolidation. Looking at the hourly chart, there is no trend, there is hardly any trading opportunities for trend followers like me. If you are the trend reversal type of trader, this is it. I see many successful stories of buy at support sell at resistance. I on the other hand is holding long, and watching the tape closely for price action and volume; focusing on volume more actually because volume is so shit these days. I will be getting out near the lows of at 465/463.
Market is in consolidation still between the two horizontal resistance on the 1hr bitcoin chart. We hit the high and then we retested the low. Last night, there was a huge sell-off of a single market order of 2000+ btc coins bring prices of all exchange down 2% or more. However, by this morning, we are at pre-crash levels. If this was a market order during the downtrend, we would have been a few percent lower than when the sell-off started. What does this suggest?
Market since earlier this week is still in chop phase, no clear indication of trend or direction. Bitcoin price is bouncing between the two blue support/resistance line. As you know, I've went long yesterday at a sub-optimal price from today's hindsight; not too concerning since my trade's time frame is much greater.
Market is sliding lower since yesterday. On yesterday's bitcoin update, I thought that bitcoin would retest lower support line and bounce, which it did. However, even with the Paypal news, the bounce was short lived and now we are at the lows of the day.