Disclaimer: The ideas presented in this article should not be taken for investment advice, and are simply the views and opinions of the authors.
We have started a new month! Bitcoin has closed a Monthly, Bi-Monthly, and today the Weekly. We will be covering higher/macro time frames, specifically the Monthly, 2M + 3M, with the Weekly being towards the end to cover more ‘immediate’ price action.
Monthly + Bi-Monthly
The Monthly close was very strong, with a close just above $13800.
So the question is, what is likely to happen over the next month or two?
There are four major levels of Support & Resistance:
- $13900 as resistance, $12475 as a potential support level, and finally $11780 being the most important region of support.
$12475 is the August Monthly high, a level talked about on the daily videos as potentially being a strong support region. We need to keep in mind that if Bitcoin is very strong, which it is at the moment, it may result in BTC being bought up off of this level instead of any lower.
Bitcoin did not manage to clear the $13900 level on this candle, so just based on this it has not broken the Monthly or 2M resistance, YET. This may be an important piece of information for us all because it means that there is still a possibility that Bitcoin still may come down and retest lower levels (use a level as support). The first one being $12475, and the second $11780.
2 Month Chart:
I personally really love this chart, as it clearly showed on September 1st that BTC broke out of its long term resistance, it also gave an area of support that was likely to be tested before moving up to $13900. Which it actually did perfectly.
When I look at this chart, I cannot ignore the $11780 level as it has the potential for a retest. However as mentioned before, we should not forget about $12475 as BTC buyers may step in and defend this level (which will show strong confidence in market participants and a rejection of any price lower than this).
Summary & what to look for:
If Bitcoin does start to break down, the levels I outlined will be where I see it the most likely to bounce off of. But this doesn’t mean it will happen, so I am prepared for it to just continue higher from here as everyone else waits for lower prices.
3 Month Chart:
This chart is what everyone should be watching for the end of this year, it is going to be the most telling in direction and will likely confirm the long term bull market if it closes above $13900-14000. This resistance is going to be key for the 3 Month close at the end of the year as well. This will mean that this consolidation since early 2018 will be resolved to the upside, breaking out of this massive ascending triangle pattern (could also be looked at as a bull flag/pennant).
The best-case scenario for Bitcoin long term is to see a convincing close above this level, similar to last cycle in late 2016, and then look for a possible retest for entries.
3 Month Summary & what to look for:
This huge ascending triangle has a horizontal resistance around $14,000. The 3M close will coincide with the 12M as well, and they both have that same key level. Any close above that is going to be extremely bullish. As mentioned, it will mean that the next market cycle phase is likely initiated with further continuation to the upside expected.
The Weekly had another good close but only just closed underneath the $13900 Monthly level. To me, there are no signs of weakness yet.
When looking at the weekly, the major area is the yellow box, a resistance zone that has held BTC down for almost 3 years. Bitcoin has now confirmed a second weekly candle above this, showing market acceptance. If you think about simple Support & Resistance, this area now has a possibility of being tested and is highly likely it provides strong support.
The reduction in percentage ‘dumps’ from each test of this zone (talking about compared from the first times in early 2018 -> now) hints that the same 'big money/institutions' that were originally using this zone to get out of the market or for shorts are now not interested in it anymore. So just based on this, what is it telling us? Price acceptance, and a major change in market behavior.
Any sort of move down to the low $12,000s, in my opinion, is a gift (or the Monthly support levels talked about earlier), and shouldn’t be ignored - It is also a really easy area to risk manage from. If this zone is tested in the next few weeks I expect that the 10SMA & 21EMA will be creeping up towards the box too.
Weekly Summary & what to look for:
If Bitcoin manages to break above the 14k level, I am expecting this to continue up towards 14.8-15k (.706 Fib level & 4D resistance), if that is broken the next level is around 16K (weekly resistance & .786 Fib).
If Bitcoin closes this Weekly underneath this level, and the following weeks also. I would then consider looking towards the mid 12,000s as they would be on the cards in my opinion. If there is any move down towards the levels mentioned (12k-12.4k) this would be a strong buying opportunity for me.
For information on the Mango Seed Program offered by Mango Research, check it out here.