Bitcoin Price Evaluation: New High Paves Possible Reversal Setup

Released at Fri, 08 Mar 2019 23:08:08 +0000

After days and times of consolidation, bitcoin eventually managed to break a fresh high for the very first time in nearly two weeks. This fresh high, up to Now, has been short lived, however, as it had been almost immediately sold into by keen bears:

Figure 1: BTC-USD, 4-Hour Candles, New High
Figure 3: BTC-USD, Daily Candles, Zone of Support
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The red zone summarized above has been our latest degree of service throughout the past couple of weeks. In addition, it proved to be a stage of resistance before and represents a significant pivot degree in our present market structure. When we break below this amount, it might represent a third unsuccessful attempt to maintain support and might result in a powerful, powerful move to the downside. We retested our macro low in the $3,000 level, therefore we could be in for a significant movement to check macro assistance. Three unsuccessful attempts to break out of our range (all three having quite powerful rejections) show that our economy is still quite dominated by distribution inside our present selection.
Our current 4-hour candle is seeing a relatively simple retracement after days and days of a up grind. We were able to shut a new high, but it had been quickly rejected and, depending on where the day-to-day closes, can result in a macro reversal setup Called a Swing Failure Pattern (SFP):

An SFP is characterized only as a drive to a new top that neglects to close above the prior high. That is a strategy often employed by large institutions to create liquidity prior to a market reversal. In our case, since we are coping with daily candles, this might mean we are in for an evaluation of fresh lows from the mid $3,500s. If we figure out how to see a reversal, the very first logical amount to check would be your $3,700 range. When we manage to shut a candle under that and our former low, we could be in for a nasty run to the low cost 3,000s:
As stated, the move is still fresh so we need to take it daily. Keep a look out for the amount outlined in red as a close underneath this would likely confirm a strong continuation to the downside. We’ve got many trapped bulls in our existing degree and a solid move to the downside could possibly squeeze them out of the rankings.

At this time, our test of resistance remains fresh so that ’s a bit early to generate a macro economy forecast. However one thing that’s apparent is the presence of distribution. When we examine Figure 3 we could observe large daily candles rejecting our evaluations of the $4,000s and so much we have yet to give a very powerful test of macro support. Thus, it seems logical that after three unsuccessful attempts the likely plan of actions for the macro economy would be an evaluation of $3,000.

This denial sets us to get a reversal known as a “Swing Failure Pattern. ” The failure to close over the new high could indicate the a liquidity run took place for large institutions to brief the marketplace.

  • On a macro level, the economy failed to break out of our multi-month range three times — indicating supply dominance in the market.
  • When we figure out how to realize a strong continuation, we can easily see an evaluation of the $3,000s before any meaningful upward progress is realized in the market.