Historic BTC setup


After some awesome pump and dump, I’ve been really torn on direction for BTC, still am. With that though, there’s something interesting happening on the daily that we haven’t seen since all-time highs.

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One thing to watch is this descending channel (look at the play on that midpoint). You get this by drawing a 1-2-3 pattern off bodies of the ATH breakout, pullback, and retest. This was a historical move in Bitcoin made even more significant by the absolute chaos. When there was blood in the streets, this is where we found value. This is where we’ve found value ever since. Unfortunately, OK Coin is not the exchange to provide a historical picture so be mindful of the principles here more than anything.

What’s interesting is the 6+ months of what I’ll call ‘upward consolidation’ taking us right to the top of this resistance. A break here is well within striking distance and smashes an inflexion point that has smothered every bull run since the ATH. Look at how that July push sets up the first potential bullish cross of the daily 100/200 EMA since before ATH’s. Very interesting things to watch that could deliver serious action out of this range.

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Now as we focus on 2015 you see the ‘upwards consolidation’ find a bit of life in Q3 and kick the grill out of our ascending channel from post ATH lows… on both sides. We’ve well broken this channel support but on the broader term, I think you note this as a higher high followed by a higher low. That full retracement on volume begs to differ but, we are talking about Bitcoin here. We also seem to have discovered higher highs on higher lows again with a breakout of that short term descending channel.

This could be our calm before the storm. I see a ton of resistance above us and nothing to get excited about for bulls until we break the EMA’s and/or that long term descending channel. Keep your eyes peeled for some excellent short opportunities targeting August lows on a failed break of this resistance or test of the local highs.

If you’re like me and just jockeying for position in a big dirty, I’d take some long around the monthly pivot with a stop by the 50% fib. You’re looking for that failed effort to enter the opposite way. Hold through 61.8% but sell everything on the way back. Not a conviction buy after this downtrend and resistance above, but… science. Definitely a spot to watch.

Update 11/06/15

Well, we basically doubled through that inflexion point. Biggest breakout since the fairy tale run to 1000 almost 2 years ago.

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Here’s the science. Look at those Fib levels continue to play. That local low is sitting on 4 different levels of support.

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Been short, short, short for the longest time. Woot, first long call on Bitcoin. 🙂

 

Aurie Philipchuk

Managing Partner @Tractai. Blockchain enthusiast. Jack of all trades. Interested in building the new generation of great companies? Let's connect.

 

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