Yesterday and today turn out to be interesting so far in terms of selling off. Bitcoin is correcting at the moment and altcoins are having a heavier pullback. In my article of yesterday (https://www.publish0x.com/djcrypto/buying-the-dip-in-cryptocurrency-because-i-believe-we-are-in-xojzmy) I spoke about buying the dip, because I believe we are in a bull market. Nothing has changed for me, despite the continuation of the sell off in cryptocurrency. I will show you why.
After my article came out Bitcoin and altcoins took another dive down (again around 8/10% for alts) and this made me buy again 25% in some of the alts that I have in mind and want to allocate my money to. If it moves further down (towards 9200$ and 8500$ for the BTC price) I will allocate again some money in the same alts plus I will also put money in BTC. Today so far seems to be a battle to hold the 9600$ which is expected, because we have been battling this level as well as resistance and right now it is trying to hold as support. If this breaks down I believe we will see the 9200$ as a next stop and after that 8500 (CME gap fill ?) is on the table. For now I think you should not be looking at 5000$ or 6000$ Bitcoin prices. On Twitter you will hear all kind of people screaming that Bitcoin will go down a lot, but you should filter out this noise and take it one step at a time.
Here I will show you a daily chart of Bitcoin for today :
You are seeing the chart of Bitcoin on the daily with the indicator RSI in the middle and OBV on the bottom. OBV will show you what the smart money is doing at the moment. For OBV you can see that the orange line is moving upwards since January 2020. If you check the blue arrows, you see that price is lower between two points and OBV is higher between the same two points. This means that smart money is not agreeing with the price and that it should be higher. This can kind of been seen as shaking out weak hands before moving further up. It is seen as well as bullish divergence.
If you look at the green arrows, you will see hidden bullish divergence. Between the two points you see prices are up and the RSI orange line is down. In an uptrend this means hidden bullish divergence, which should lead to higher prices normally. I have also drawn two green lines in the RSI indicator. One line got broken by the orange line which means downfall and the other green line in my opinion should hold as support. We could see a bounce from here, but nothing is certain in trading cryptocurrencies. If we manage to hold the 9600$ level, I believe RSI will slowly move down to this green support line on the RSI and this could mean good news.
Do understand that all of this does not mean at all that we are for sure going to move up in the next days ! In trading nothing is sure and it can always go both ways. The OBV indicator can break down as well of course, but for now it is showing positive signs during this pullback. I am just showing some things I am watching and make me wary that I can buy the dip for now ! Nothing in the charts are showing me that we are going down to 6000 or 5000 or even lower. We even have a golden cross awaiting in the next couple of days which can also be seen as bullish. For now I am happily buying the dips and will continue to do so if nothing changes on the charts.
Hopefully this has been of some help to you. Do not get scared because of red candles for a couple of days. We were going up for about 7 weeks now so a correction is only healthy.
I am not a financial adviser and this is not financial advice. Do your own research and make your own decisions !