Bitcoin price has remained stable for the first time in three months. It has found resistance at $8,000. An indication of possible market surge.
Bitcoin / U.S. Dollar
Bitcoin has been trading upward in an uptrend since 15th July. The uptrend has been very good, with a stable uptrend followed by corrections before up swings showing a trustworthy up move rather than a hype uptrend without any sensible corrections within it.
I decided to look closer at the up moves to gage some type of market sentiment and look for logical places to enter. When I began analyzing the trend, I deciphered the up move into impulse and corrective waves to figure out what’s happening.
When I analyzed the up trend, I can see the up trend is broken down cycles. For each cycle, there appears to be an impulse swing, followed by a correction, before the next up move occurs. For each cycle, the price does NOT go below the swing leg before the up move. For each cycle correction, price is falling but is ending it’s correction on a key side-wards support line before bouncing for the next cycle.
With the side-wards support line in play, price is kept contained in an uptrend. Not only is the side-wards support line in play, there is also the 50 moving average right at the side-wards support which may well enforce the side-wards support line and make it more likely to work due to multiple technical indicators showing strength in this specific area.
With price near approaching the side-wards support line, I believe we are about to have a cycle 3. When price hits the side-wards support line, this is when the cycle should be watched for. If price hits the side-wards support line and then bounces to the upside, price could complete a cycle 3 impulse leg, and achieve an upside target as high as 9158. The 9158 target also coincides with a of the previous cycle swing leg, just as cycle 2 was a of cycle 1’s impulse move.
Bear in mind that if price breaks strongly below the side-wards support line and the 50 moving average support, then this idea may well not work out this time. If it doesn’t work out, I’ll simply go back to the drawing board. Being right isn’t important, but having a plan, is.
NOTE: The views expressed here are not financial advise. Do your own research effectively and you’re solely responsible for your actions.