Bitcoin Hit Resistance at Recent Swing High

Since issuing a buy signal the other day, Bitcoin quickly jumped $40/coin.  There it met resistance at $780, which was predictable given that the recent swing high was stopped there.  $780 was discussed in our last update as a likely place of profit-taking.  This has come to pass.  The question is:  What is next?”

In my opinion, while of course there will be lots of profit-taking and turbulence along the way, there is little (long-term) resistance before ~$860.  There, price will hit the top of the square and could (perhaps) make a swing high there.  If price breaks above the top of the square, the 4^th arc pair is a little above $1,000.

Like counting cards, one can never be 100% certain if the next candle will be red or green.  However, I can’t shake the expectation that a close above $780 will see a very quick rise that I for one wouldn’t want to miss.

Here is a shorter-term setup of the same daily chart, starting at the Aug 1 panic low.  Here you can see that pricetime was stopped by the 3^rd arc pair.  The end of the square, in time, is 12/8.   End of a square is often a time of accelerations or reversals.  Will we see one here?  The charts are a mixed bag.  The longer-term setup referenced first, suggests this market is going UP.  The shorter-term chart is not so unambiguous.  The fact is, we are still on the dark side of the 3rd arc pair there.  Technically, hitting that arc pair was a sell signal.  If we get to the end of the square (12/8) before getting a close above at least the first of the arcs in the pair, I might consider taking profits and waiting until we get to the sunny side of the pair to re-enter the market.

Happy trading!

Remember:  The author is a trader who is subject to all manner of error in judgement.  Do your own research, and be prepared to take full responsibility for your own trades.

Image from Shutterstock.

Bitcoin price

Jim Fredrickson