Bitcoin Rally Was Starting to Feel Unsustainable
Editor’s Note: This bitcoin analysis was in the early hours of Thursday (UTC).
Would you look at that…
Those bars are each 8 days long. Bitcoin has not seen a red candle since August 2016. The resistance I spoke of earlier at $1030 (3rd arc pair) has been decimated, as has the top of the 3rd square. The 1×3 Gann angle is current resistance, but I for one would not bet the house that it will be enough to stop this juggernaut.
Indeed, I am torn at the present. On the one hand, who would possibly want to miss out on a rally like this? On the other hand, this is unsustainable. Vertical rallies like this (with no meaningful corrections or consolidations) always end in tears for most people. It WILL correct, and when it does the fall will be sudden and drastic. As I mentioned to a fellow trader last night, I am inclined to take profits here, knowing that when a meaningful correction occurs I will likely be able to buy cheaper than current levels. However, it hurts to leave money on the table in such a wild ride as this.
On the long-term chart above, the 4th arc pair is in the $1350 area.
The daily chart:
The 4th arc pair has been violated. The 2nd arc of the pair and the top of the 3rd square loom close. We are VERY close to the end of the 3rd square in time as well, and the fateful 1×1 Gann angle. I note that the sweet spot seems to be just about $1200 on this chart.
8-hour chart:
One has to stretch the setup on the 8-hour chart to the maximum size to accommodate this rally. Doing so puts the next resistance at the top of the square ($1158) and the 3rd arc pair ($1265).
Overall, like many, I have added to my trading account in the past few weeks. I think I will step aside and watch this show from the sidelines for now. This is now looking and feeling far too much like a bubble, overdue for popping. If/when we get a convincing close above the $1200 mark, I might re-consider that decision.
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.
