Here is a quick update on my last post about the Bitcoin Hash ribbons on the daily. It showed a BUY signal a couple of days ago and now the weekly has flashed a BUY signal as well ! This is big news, but be aware; this does not automatically mean that BTC will go up from here. A dump is still very much possible first, but even a dump on the weekly chart down towards 6800 would still be bullish for Bitcoin. I am going to show you a weekly chart with the BUY signal :
You can see the BUY signal on the Hash ribbons indicator. Every time this indicator flashed a signal it has proven to be very profitable. However there are often drawdowns first before it starts to move upwards.
Here you can see the weekly chart with the green lines as a big channel. Be aware that you can draw this channel differently in many ways ! I like it like this because it shows me that we are already for quite some weeks above it and that we are hugging it as support. Volume is very low and this is rather negative to be honest. When a channel breaks you want to see volume pick up to show that the channel is definitely broken. This is not the case and makes me wary. Furthermore I have drawn a yellow line that seems to be very important since the low of 3200$. We were holding it very nicely until the Corona dump. This dump almost seems an anomaly, because after that we are holding it again for a lot of weeks already. Right now we are hugging it again for several weeks and is kind of scary. You would like to see a reaction out of it, but so far nothing. This makes me wary that we might have a decent dump incoming. A big move is going to come, because we are hugging the yellow line and the green line for too long now. The Bollinger Bands are squeezing as well and volume keeps on going down. We are getting at an apex and we will see a reaction !
I have drawn red arrows that show an interesting path BTC might take. If we get a decent dump we might go all the way back towards 6800/6900$ and if we can hold it there as support, it will be very bullish actually. This would create potentially a very nice inverted head and shoulders pattern. If we break the yellow line, the green line and the 8600$ area, people will get bearish again. We have several areas of support first like the low 8K’s, the higher 7K’s, the mid 7K’s and the low 7K’s. We might never get towards the 6800/6900$ level, but it is still on the table for me. I have sprinkled a lot of buy orders in all kinds of areas from 8900 all the way towards 6800$. With the potential inverted head and shoulders we would equally create a very nice W-pattern and this is often seen as bullish as well.
In my recent posts I have continually said that I still lean bullish towards the upside. It is very difficult at the moment to say where Bitcoin is going. We are consolidating for a couple of months now and the stock markets look kind of toppy at the moment. Since we are kind of correlated with them, it seems we are going to move down with them. Yesterday was a clear example for me. Bitcoin was doing ok being above 9300$ and stocks were in the green as well. Then the stocks dumped to red and Bitcoin followed them and now we are once again under 9200$. Normally consolidation is a good thing after a big move up and can lead to another big move to the upside, but since stocks look toppy, I am afraid we are going to follow them downwards. Going down means Altcoins moving down as well and most of the time they dump harder. This could be a unique opportunity (maybe the last one ?) to buy your favorite alts, before it is too late.
All in all right now I am neutral and it is very complicated to predict what is going to happen. As a trader it is a tricky area, but as an investor you can keep on dollar cost averaging in. The BUY signal on the Hash ribbons is bullish and can be seen as an indicator to buy some more BTC. Either way if we are going to move upwards above 10.5K I am going to open a champagne bottle ! If we move to the downside I have a lot of buy orders all sprinkled around and if we move sideways for a little while longer, Altcoins can keep on performing !