• Henk ter Linde

Will we correct to the mid 8s?

To prevent sounding like a broken record, I would refer you to last week's post to see how I see the current trend we are in. We made it all the way to 10.5, as expected, and we started to correct. A correction that to my surprise, surprised a lot of people. I guess bull fever is a real thing after all. So, where are we now?

Well, normally you would expect any correction to have a hard time passing the 50/618/65 zone when you are still consolidating. You very rarely shoot from the bottom straight past the previous top. Things take time. The Xi pump was clearly a bull trap, as it tapped the 50 and even had a small throw over. My expectation was we would repeat the same exercise this time. Is that certain? No, by no means. This could still be minor correction - a retest of the bottom red line S/R level and we could bounce up to the actual 618 from here. It is a completely valid bullish viewpoint. Personally I would not long from here or even exit shorts. I would not start a short here either though.

It is a bit too soon to tell, but we could see a Swing Point Failure forming on the 4hr. However, for now the macro pattern is clearly lower highs and lower lows.Until we form a higher high and higher low, it is nothing but speculation. It looks like we may have some kind of descending wedge structure, but again, it is hard to hang your hat on that too. What we don't see yet is aggressive dip buying. That makes me assume we might be testing the upper green S/R again and if we fail, we will most likely drop to lower green S/R line. Or, since those two lines together also are the boundaries of a trading range, we land smack, bang in the middle. Doesn't really help does it? Well, in my mind TA is not there to tell you what will happen, but what will most likely happen if a certain pattern breaks, changes etc, so you can prepare your tactics accordingly. The good thing is that RSI and Stochastic are both very low, so a bounce, at least short term, is likely. It can go much lower though. A dip to the 10s in RSI is not uncommon in BTC and could correspond on either of the two green support lines, depending on how the market acts in the mean time. For my longer term prediction I once again refer to last week's post, but let me make it a bit more clear how I hope it will play out in the medium term. Again, exact levels can vary, also depending on the dumping of BTC on the market by certain parties, but the general structure could be something like this:

A few things to pay attention to. This is the 12 hr chart and I assign particular value to the 12 hr Stochastic. It has been a great guide so far, but something only works until it doesn't. At this point I see some (!) indication that it may tend to cross bullish in the next 12 to 36 hrs and that would be a good indication hat we might be getting a relieve bounce. Most likely into the trading range you see at the level of the b. Also look for the RSI to break the down-sloping resistance line for confirmation. It is my firm believe (again: read last week) that we will not bounce straight to100K but that we will have some additional correcting to do, which means I eventually expect us to end up somewhere in the trading range where the c is located. Now, if you ask me - and you shouldn't - I will personally put money on it that it will be at the lower end of that trading range, if (!) it even holds. So close to 8400 but very possible even as low as 8K or just below. Of course, nobody knows and this is just my view. As always: be safe, trade responsibly and don't over-leverage in a market like this.

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