Sive Morten
Special Consultant to the FPA
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BTC 06 August 2018 Technical update
(Updades weekly, on Mondays)
So another week has passed and we update our BTC view. Our analysis for last week was partially successful. We correctly suggested downside retracement on daily/intraday basis but thought that it should be a bit smaller. Meantime, BTC has dropped deeper and short-term situation has changed.
Result of last week is bearish engulfing pattern, which suggests short-term downside continuation. It doesn't cancel yet possible upside perspective, but not on this week probably. Thus, it seems that this week downside direction will prevail. Although we have some other patterns of bigger scale on weekly, but they are not interested us right now.
As we've mentioned previously, our major weekly/monthly AB-CD 1.618 extension target stands at ultimate low ~2400$ and butterfly target stands around 4800$, but they are both just technical calculation.
Fundamentally, we've estimated that BTC breakeven mining expense stands around 5500-5800$/BTC. It means that this is fundamental barrier that it will be difficult to pass. Ocasionally we could suggest fast emotional spike down, but hardly price will hold there for too long, only if BTC era will turn to collapse.
Last week, on daily chart BTC indeed has turned down right from major 5/8 Fib resistance, but retracement has become deeper. Take a look price exceeded 1.618 extension of AB-CD pattern. This is not typical for normal bullish market and tells that short-term sentiment has changed probably. Now market almost stands at major 5/8 support and neckline of former H&S pattern (that we've traded previously), which is natural support area. As we have bearish engulfing on weekly, it is logical to suggest some upside bounce up from here and then downside continuation in a shape of large AB=CD pattern.
It is unclear yet what shape price will take on its upside bounce up from major support, but most common pattern in such circumstances is "222" Sell. But also it could be simple one leg upside retracement. As soon as it will be completed, we should get chance to go short with another large leg down on daily chart. Current picture is just a suggestion of scenario that could be formed here. Since retracement has not started yet, we do not know clearly what resistance level market will hit - 3/8 or 5/8.
That's being said, scalp traders should get the chance for short-term long trade around major 6800 daily Fib support, while daily traders should wait when upside retracement will over, and if we will get clear bearish pattern - try to go short based on weekly bearish engulfing pattern.
(Updades weekly, on Mondays)
So another week has passed and we update our BTC view. Our analysis for last week was partially successful. We correctly suggested downside retracement on daily/intraday basis but thought that it should be a bit smaller. Meantime, BTC has dropped deeper and short-term situation has changed.
Result of last week is bearish engulfing pattern, which suggests short-term downside continuation. It doesn't cancel yet possible upside perspective, but not on this week probably. Thus, it seems that this week downside direction will prevail. Although we have some other patterns of bigger scale on weekly, but they are not interested us right now.
As we've mentioned previously, our major weekly/monthly AB-CD 1.618 extension target stands at ultimate low ~2400$ and butterfly target stands around 4800$, but they are both just technical calculation.
Fundamentally, we've estimated that BTC breakeven mining expense stands around 5500-5800$/BTC. It means that this is fundamental barrier that it will be difficult to pass. Ocasionally we could suggest fast emotional spike down, but hardly price will hold there for too long, only if BTC era will turn to collapse.
Last week, on daily chart BTC indeed has turned down right from major 5/8 Fib resistance, but retracement has become deeper. Take a look price exceeded 1.618 extension of AB-CD pattern. This is not typical for normal bullish market and tells that short-term sentiment has changed probably. Now market almost stands at major 5/8 support and neckline of former H&S pattern (that we've traded previously), which is natural support area. As we have bearish engulfing on weekly, it is logical to suggest some upside bounce up from here and then downside continuation in a shape of large AB=CD pattern.
It is unclear yet what shape price will take on its upside bounce up from major support, but most common pattern in such circumstances is "222" Sell. But also it could be simple one leg upside retracement. As soon as it will be completed, we should get chance to go short with another large leg down on daily chart. Current picture is just a suggestion of scenario that could be formed here. Since retracement has not started yet, we do not know clearly what resistance level market will hit - 3/8 or 5/8.
That's being said, scalp traders should get the chance for short-term long trade around major 6800 daily Fib support, while daily traders should wait when upside retracement will over, and if we will get clear bearish pattern - try to go short based on weekly bearish engulfing pattern.
