I will first go over the technical analysis and charting, then discuss my projections for the upcoming short term and intermediate term. Let’s take a look at the chart below. Note, the support/resistance lines were drawn a while back and some still holds true today.
support and resistance
Look at the chart, a break above the descending trendline is a very bullish move.
I am slightly bullish here. I saw those sell orders being sold on bitfinex, it is a bit choppy and not decisive. The support is solid and we bounced off major support. The USD exchanges retested the lows but RMB showing strength here.
Interesting movement in the market, we now know people expected a bounce at 2000, price proved it to me. Price jumped by almost 100 CNY from the lows, traders who expected a bounce at 2000 already bought. We will be able to see if this selling is the next move down or a technical move to sweep stops and fuck with us.
Market broke down from the bear flag yesterday. Currently, it is selling off. I believe we won't be stopping here because there is no prior support at this area. I've highlighted where the market will go. This is in my opinion a strong support area which also coincide with the 2000 CNY round number. I expect a bounce here, but I wouldn't trade it with such a strong down trend. In fact, I believe we will likely breach 2000CNY and go lower, but retest 2000 on a subsequent bounce.
I believe that there is a trend and momentum for everything that revolves around us. Technical analysis captures the essence of that in the stock/bitcoin market. I understand some are skeptical about technical analysis for trading especially some hard to understand TA stuff like Elliott wave, Gann's theory and Fib numbers.
Market since earlier this week is still in chop phase, no clear indication of trend or direction. Bitcoin price is bouncing between the two blue support/resistance line. As you know, I've went long yesterday at a sub-optimal price from today's hindsight; not too concerning since my trade's time frame is much greater.
Hope everyone had a good weekend. Bitcoin prices on the other hand have completely retraced the big green bar on the hourly from two days ago. This is bearish because market rejected 3000CNY/490USD level; market didn't even bounce that much. Now, all the people who bought btc up to 497 are all wrong.
At this juncture, we are going to retest 2900CNY/467USD. Will the second time retesting this area hold? I do not know. If recent market choppiness is any indicator, we should bounce in the short term.