Wait for it...
I figured it might be nice to follow up my post from before the weekend now. Last time I claimed that we had one line to watch and that we needed to open and close a weekly candle above it for me to change my bearish medium term outlook. Well, not only did we close last weeks candle above it, we (obviously, duh...) also opened above it. So that is one win for the bullish team.
Let's look at the weekly first.
So yes, we opened well, but currently we seem to be struggling a bit. It is still early in the week, so everything is still on the table. Volume has however been steadily declining during the recent price hike and we are showing some bearing divergence. The price seems to be stretched, but I have been saying that since 9K, so not sure what to make of that. Let's zoom in a bit.
If we look at the daily, my first target would be a retest of that blue trading range, since we already broke through the 'blue line'. If we do make do a quick 180 here, and we move straight back up above the line, things look promising. I still want it to close the weekly above that blue line though.
There is another factor at play. As you can see we retraced all the way back up to the 886, and as I have mentioned since forever: BTC loves the 886. So getting significantly above that would be bullish too.
For BTC to rise much further we also need to see a decline of the USD. Now I differ greatly here with a lot of traders I respect very much, like @TXWestCapital and @TraderX0X0 for instance (go find them on Twitter), so see this as the outlier case. I see it as an outlier possibility too. I already alluded to a small-ish further retrace to the mid to high eighties last week (after a relief bounce), but let's go crazy, shall we?
I am not a fan of Elliot Waves but something is to be said for the logic behind a further retrace. However, the counterarguments are strong too. Deflation followed by a fall in the stock market etc. I have been expressing my astonishments about the continued rise of the SPX, DJI, Nasdaq etc. To me that was/is explained by USD inflation, but if those markets are turning now, the DXY case probably won't hold.
A lot will depend on developments leading up to and following November in the USA. The charts are clearly setting up for a movement and it could be both ways.
As always: trade safe, be safe and have fun doing it!
Come find me on Twitter: @htltimor
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