Bitcoin Analysis: 13/10/2019
We saw some good volatility in Bitcoin in the last week, with daily price range moving more than 500 in a few days. Volume was however not particularly impressive, so my personal take is that we are still waiting for a bigger move in the coming weeks.
Looking at the daily chart, the price is trying hard to break above the major resistance of the 8.4k confluence area and the 200 SMA, which have moved to 8.7k. It is currently supported around the 7.8k region (the red line), and the next level of support would be the 7.4k F3 fib. ADX is at 53, with DI- higher than DI+, which means the downward trend is pretty strong. I’m anticipating more downward actions this coming week.
In the previous week, I sold a call at 8750, and this level was breached midweek, so I closed my position for a loss when my premium collected doubled. Eventually, it dropped back and would have expired worthless, but I believe I managed the trade correctly to prevent myself from risking too much, in the event price runs all the way up. This week, I sold a put at 7750 (the red line) and will look to book profits if I collected about 50% of the premium. This is key since my directional bias is towards the downside. The current position is up about 15% of the total premium.
Zooming out to the weeklies, we have a much clearer picture of price action. Price is looking to break out of the consolidating trend lines, with a higher probability of a downward move as it is below the 21 weekly MA with this MA starting to slope downwards. The DIs are touching each other and looking to invert, which is also a bearish signal.
This is looking to be an interesting week, with most indicators signaling bearishness. Will the 4Chan meme prophecy hold true? Will we eventually see 16k this month? With only half a month left, I’m pretty skeptical.
