It has been a little while since I last posted something so I want to put you all up-to-date regarding Bitcoin (BTC) and Altcoins in general.
We have seen some nice moves by Bitcoin and we actually went above 14K for a little, which is great ! Right now we are witnessing a form of drop, because of a daily bearish divergence we had on the daily chart. I will show you here :
Bearish divergences are created when prices are moving upwards, while for example indicators like the RSI (Relative Strength Index) and the CCI (Commodity Channel Index) move downwards (see the red arrows). This means that momentum is changing downwards (less strength), but price is still moving up. This is very often going to turn around and we see this happening today (Monday). Price is going down, but I am happy to see that Bitcoin is resilient. I am expecting prices to go towards the 13K/12.8K levels and even 12.5K and as lowest 11.8K are not out of the question. These levels however seem long opportunities. This is because of the OBV (On Balance Volume), which is showing a lot of strength on the daily and as well on the weekly chart.
Here is a weekly chart :
I have drawn red arrows and green arrows. The red arrows show that on the weekly chart we do not have a bearish divergence, which is a good thing. Price moved higher in between the two points where you see the arrow and the RSI went slightly higher as well. This is enough to not create a weekly bearish divergence. When we look at the OBV and the green arrows, we can clearly see how strong accumulation is. Price went barely above 14K at the end of October, but OBV has been rising a lot higher over time. Do not be fooled by people that say it will go to 8K and even go below 3K again ! OBV is not showing anything near this and is showing a lot of strength. Until you see the OBV move downwards and break down, do not fall for prices moving completely down again !
When you consider investing or dollar cost average into BTC you can do so ! Do not be afraid of the price being high. On the weekly chart we look bullish and this is an important time frame. A lot more important than a short-term time frame like the 4-hour or the daily chart. We might move down short-term (bearish divergence daily chart), but nothing suggests that this will last for weeks and that you can buy below 10K again. I do not expect prices to move under 11.8K (support area would be around 11.8K/12.2K) and it seems more likely that we are going to see another move upwards above 14K towards 16/17K in December ! The month of November seems to me a pause before moving further upwards. We could range between 11.8K and 14K before December would give us a boost above 14K.
Here is a monthly chart :
You can see a channel that I drew in price that we broke upwards in October. Our monthly close has been strong, but we have been held back by resistance around the 13.8/13.9K level, which is completely normal. During the last bull market in 2017 the monthly got stopped out at around this level and the end of May 2019 showed this level as resistance with a big wick (rejection). The monthly close this time is showing a whole different picture. No big rejection wick this time plus we broke out of the blue channel I drew. It does not suggest a big rejection and a move once again down, like in 2019. It seems more likely that we are finally seeing preparations (strap your seat belt), before going towards all-time highs again !
The RSI is interesting as well. I have drawn some horizontal lines with different colors to show several things. The red line is for now resistance and we have to break above this on the monthly to move towards 16/17K and even 20K. The green horizontal line has shown quite some touches and seems very important. At the end of August/beginning September 2020 we held it as support, while it was several times resistance before that. Everything moves into steps and this was an important step ! Right now we see resistance at the red line and this is why I believe November might well be a pause, before December will break this red line and prices move upwards above 14K.
I am not going to chart Altcoins, but I rather talk a little about it in general. Altcoins for me have been weak and it does not seem wise to trade them. Be patience and if you want to invest/dollar cost average your favorite alts, you can try and start look for them. In general Altcoins seem to pump in the first quarter of a year, so in this case it would be in the beginning of 2021. Right now I believe we are seeing some signs of a “forming” of a bottom. We could likely see lower prices (example ETH going towards 360$ area, VeChain towards 0,0085$ level, ICON towards 0,28$ area, etc.), but a bottom seems very near. I am dollar cost averaging in several Altcoins, like Polkadot and Chainlink for example. I do not mind if it moves lower some more, I will be continuing moving into them with small amounts.
Bitcoin is looking very strong on higher time frames like the weekly and the monthly. These are the more important charts. The daily chart has shown a bearish divergence and this is why we are moving downwards now. I do not expect prices to go below 11.8K and it seems an opportunity to buy some BTC if it hits 13K, 12.8K, 12.5K, 12.2K and 11.8K. All these levels you can see as little steps to buy some small amounts If you can effort it of course. Get ready for a break above 14K, because the charts are looking bullish !
This is not financial advice and I am not a financial adviser. Please do your own research and make your own decisions.