• Henk ter Linde

We are at critical resistance...

The problem with TA is that sometimes not very much changes, if you have more or less accurately predicted ... well, that is a strong word... chosen the correct possible path an asset takes out of many possibilities. Today's update is therefore not too different from last week.

You can clearly see that the resistance level of around 9540 (depending on your exchange) is still holding for now. We did break out of the long term down-sloping channel and nicely retested that before charging at the all important 9.5xx level, which is the last bearish bastion before challenging 10/10.3K. Now, I personally like to look at the 12 hr Stochastic (not Stoch RSI) as it has proven to be a somewhat reliable indicator when you want to establish if a move up or down is more likely. Since it currently is high, the more likely move in my opinion is down. That is also confirmed by a Swing Point Failure as indicated. How far down? Well, on the charts I indicated 3 possible levels.

The least likely one is that we maintain the 9K psychological, but there is some technical support there as well, so I would not say it is completely unlikely. Next is the previous level for daily closes, which is - again depending on your exchange - around 8.9K. The deepest I would like to see us retrace is the level of the previous weekly closes, around which is between 8.6 and 8.7K. Now, another possibility is that this is the end of an impulsive move (in Elliot Wave terms: we completed the first wave), in which case a more radical retrace is possible to 7.6/7.4. That would also fit with another retest of the top of the descending channel. There are some technical reasons why this is a violation of EW rules, but with all the exchanges, the dominance of derivatives, etc, I am inclined to ignore those.

There are some nice confluences around that level - the dotted line is a trend line (not a support line) - so it would not be totally out of the question. So, am I saying there is no chance we break the 9.5 level, move to 10.3 and beyond this week? No, of course not. There is no way to predict exactly what an asset will do in the market. I just believe it is more likely for us to reset, gather some new supply before making such an important break. It has happened before though. If we are in a parabolic rise (too soon to tell), we could go sideways for a bit before exploding up. Open Interest is around the 1B USD mark and historically BTC always makes a big move at that point. I am happy for BTC to surprise us.

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