Interesting Bottoming Fractal for BTC
Updated
Bitcoin has seen a nasty capitulation candle down to the 55 Monthly EMA / 0.618 macro Fibonacci level from its all-time highs and has since bounced to the 30k region.
Given the rapid selloff, I firmly believe that we are now closer to a bottom than a top. The most bearish calls and technical analysis that I have seen (barring zero), are the 12k calls, 200Week moving average call (currently 22k or the 55 monthly ema bottom call at 24.5k).
There is a possibility of a bullish relief rally continuing should the NASDAQ continue to show strength and the dollar continue to weaken. However, Bitcoin remains in a bear market until we break the 200 Day moving average / 50 Week moving average and hold it as support.
In the bearish case, I am sharing an interesting fractal that would suggest that the majority of the downside move towards the bottom could be In and how we could arrive at the 200 Week Moving average, which has marked the bottom on the past three big bear market selloff.
Not financial advice. Note, that this is only one of many scenarios that I am currently evaluating that could play out.
Given the rapid selloff, I firmly believe that we are now closer to a bottom than a top. The most bearish calls and technical analysis that I have seen (barring zero), are the 12k calls, 200Week moving average call (currently 22k or the 55 monthly ema bottom call at 24.5k).
There is a possibility of a bullish relief rally continuing should the NASDAQ continue to show strength and the dollar continue to weaken. However, Bitcoin remains in a bear market until we break the 200 Day moving average / 50 Week moving average and hold it as support.
In the bearish case, I am sharing an interesting fractal that would suggest that the majority of the downside move towards the bottom could be In and how we could arrive at the 200 Week Moving average, which has marked the bottom on the past three big bear market selloff.
Not financial advice. Note, that this is only one of many scenarios that I am currently evaluating that could play out.
Note
Update: I was wrong. I did not expect this market to sell off as far and fast as it did. I know many traders will not admit when they have messed up, but I want to be as transparent as possible to anyone following this post.Given the current market and macro situation, this could likely go lower.
Given the failure to hold the 200week moving average on a closing basis, I have since changed my viewpoint on when to aggressively enter long-term Bitcoin positions. This bear market has taught me the importance of not catching falling knives.
Instead of attempting to buy the bottom, I will look to buy the reversal out of the bottom. This will be marked by a few things in my opinion:
1) Inflation peaking / Fed looking to ease once again
2) Reversal of the trend based on several indicators. For example, a higher low being set on a higher term timeframe such as 5d or 1week, or crossing key resistance levels, moving average being breached.
I will look to enter aggressively with a stop loss on a reversal of trend, with a stop loss in case my bottom prediction is wrong.
Trade closed: stop reached
Further to the above, this is an unprecedented macro environment, and most past models about where the bottom can be expected have since fallen by the wayside.As a result, I firmly believe that the best risk reward entry will be to enter after a reversal from a potential bottom has occurred, and use a stop loss in case the bottom prediction is wrong.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.