Bitcoin Inching Toward a Decisive Moment

Journalist:
November 2, 2016

For those who have been following my work, in yesterday’s bitcoin analysis article we postulated that the 2nd arc of the arc pair might hold bitcoin price back for a bit – maybe cause a pullback – and that is what happened.

I am still of the opinion that the 4th arc pair will likely be broken. This would make the 5th arc the next target.  However, I do not know this for certain.  There is still that disconcerting bear setup that we looked at yesterday.  Let’s look at it again:

All those arrows are pointing to places where Gann angles provided support or resistance, even if for just a brief period.  Take a minute to look closely at that. It’s really quite amazing.  Presently, the 8×1 Gann angle stopped the recent advance.  Amazingly, on the bull setup, S/R was revealed at the exact same place, by the 4th arc pair.  (Wheels within wheels – I never cease to be awestruck…)

The disconcerting thing, is that this entire advance has occurred within the 2nd arc pair of this bear setup.  My regular readers are aware that I have written that “anything can happen while pricetime is in an arc pair”.  This includes strong rallies…

We are very close to exiting that arc pair.  This means we can not rule out the possibility that the rally will end soon.  Coupled with the 8×1 angle having stopped the advance is the fact that on the longer term setup, (see yesterday’s article), we are at the end of a square, which could herald a reversal. So even while being optimistic, we should not be foolish. Protect your account.

Let’s put those 2 setups on the same chart.  It will be confusing, but feel free to refer to the 2 charts above to see what each angle and arc therein is:

I have labelled the arcs to make it easier to see it. The “2” is the 2nd arc pair of the bear setup, and the “4” is the 4th arc pair of the bull setup.

IMHO, if the bears win the contest, a warning will be if the Gann angle presently just below price, breaks.  So in my case, I might place a stop just below that angle at $712.  Note that this is a personal preference and strategy.  I am not counseling others to follow my lead. I am simply illustrating one possible way to use geometry to execute trades, targets and stops.

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.

Featured image from Shutterstock.

Jim Fredrickson @jimfred1276

Jim has an MBA from the University of Southern California. He has been trading commodities, forex and bitcoin since 1993. You may email him directly at: jimfred1276 at gmail dot com. Feel free to follow him on twitter.