Hi Traders! Bitcoin forecast follow up and update is here. On November 24th I shared this “Technical Analysis – Bitcoin Short And Mid Term Forecast” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
Looking at the H4 chart, we could see that the price which was moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Also, while measuring the first two waves of this bearish trend pattern using the Fibonacci expansion tool we have a key support zone that has formed based on the 161.8%(55138.36) Fibonacci expansion level of the first wave and the 61.8%(53392.19) Fibonacci expansion level of the second wave. Price has currently reached this key support zone and in addition to this, we have a bullish divergence that has formed between the first low that has formed at 55609.76 and the second low that has formed at 55392.00 based on the MACD and RSI indicator which we may consider as evidence of bullish pressure. So based on all this, my short expectation is bullish and my mid term expectation is bearish here.
Bitcoin H4(4 Hours) Chart Current Scenario
Based on the above-mentioned analysis in Bitcoin my short term view was bullish and my mid term view was bearish. The price action followed my analysis and moved exactly as per the plan here. The short term bullish move happened from the key support zone and then the price moved lower further as I expected it to and delivered a wonderful move to the downside!
You can see this move clearly on the H1 chart below.
On the M15 chart, the market provided us with various facts supporting the short term bullish view and mid term bearish view. After the price bounced from the key support zone, on the H4 chart we had a small pullback and this pullback happened in the form of an ABCD pattern on the M15 chart. In addition to this, the price created a bullish divergence between the first low that has formed at 56121 and the second low that has formed at 55841 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the short term bullish view. Then as you can see in the image below how the price moved higher after that and provided an amazing move to the upside.
The market then provided evidence supporting the mid term bearish view on the M15 chart. We had a good uptrend line that had formed and the price which was respecting this dynamic support had moved lower and broke below it. We may consider this as a fact provided by the market supporting the mid term bearish view and also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower further and provided a fantastic move to the downside.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted to us and took the right action according to that.
For similar trade ideas and much more I invite you to
Also, you can get one of our strategies free of charge. You will find all the details here
If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Traders Academy Club Team
