The Bitcoin market is relatively unchanged from yesterday. A bit higher but nothing remarkable. Here is the 8-hour chart we looked at yesterday:
As we can see, the 2nd arc of the pair provided support, but the top of the square has been solid resistance. This leads us to the recurring question traders ask all the time” Which will give first? Resistance or Support?
I continue to believe that the support will give first, for reasons discussed at length in recent columns. In a nutshell, it’s because the 1st arc pair has already been violated 3 times. I expect it is therefore highly likely that we will see a test of the 2nd arc pair.
If my working hypothesis that this is an A-B-C wave pattern is correct, then one more wave down to the area of the A low would be appropriate. Anywhere in the yellow highlight would be tidy on several levels.
Here is the daily chart:
As you can see, price is still super-glued to the 3rd arc pair. Today marks 180 degrees from the start of the bull advance of 5/20 (yellow highlight). My guess is that a sudden spike low will see a quick reversal, and the start of the next rally.
But this is all speculative. I would not trade on such speculation. I would not short a bull market, even though I believe a spike low is likely coming. I have been burned by that trade far too many times.
As I have said in the recent past, I will wait for one of two things to happen, and then go long: A) buy after a spike low followed by a rebound, or B) buy a successful and convincing close above 3rd arc resistance. One of the two will likely happen in days (or less), not weeks.
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.
