Is Bitcoin trading inside a channel? Which way would it break?
Good morning folks, another Monday morning has arrived and hope you all had a great weekend. Mondays are normally grey in the Bitcoin world! Let’s find out whether the sky is blue today or not? :)
When is the new ATH?
A global pandemic is an unforeseen event which in other words also means that we have to be patient with it! The markets started to react immediately upon the event’s advent, eventually seeing a huge crash but now as the curve has started to flatten, they are on the path of recovery. The tweet below is a testament to the fact that holding our patience can eventually pay us. According to the chart provided by this famous technical analyst, we might witness bitcoin going further down in the near future but once the accumulation phase is over(between $2500 — $1900), we would be well on our way to see a new ATH.
$400k BTC?
On the other hand, someone is predicting a $400k BTC. There was a diamond bottom formation over the past several months on the daily which has finally broken in the upward direction.
What is meant by diamond formation?
Firstly, identifying diamonds is very hard, once identified, you might make a good fortune out of it. Diamond patterns usually form over several months in very active markets. The volume will remain high during the formation of this pattern. The Continuation Diamond pattern forms because prices create higher highs and lower lows in a broadening pattern. Then the trading range gradually narrows after the highs peak and the lows start trending upward. The Technical Analysis occurs when prices break upward out of the diamond formation to continue the prior uptrend.
Now as we know what a diamond formation is, we need to see whether $400k is a bit optimistic or not.
No. of BTC ATMs = Price of BTC?
Bitcoin is a new asset class and the community does everything to invent new trading indicators. Below, we see such an analysis which we can never see in traditional finance(imagine the price of Bank of America stock[currently $23.25] equalling the number of ATMs they have[16000+]). However, the price of Bitcoin seems to exactly correlate with the number of Bitcoin ATMs in the world. More power to Bitcoin!
Is Bitcoin really a decentralized currency?
Sorry to disappoint you Bitcoin enthusiasts, as it seems Bitcoin’s claim to be ‘decencentralized’ does not seem to hold true as China seems to control more than 80% of Bitcoin mining. A real bummer!
The ever narrowing channel
Below is a 4hr trading channel presented by a TradingView user which seems to be holding true so far.
According to his chart below, we had bumped into a great resistance trendline at $7300. So it was expected to see a correction to $7110 at least and that is what exactly happened last evening. Since then we are trading in the channel between $7100-$7200.
In case we are able to break $7110 then $6950 will be tested. However, if we break the resistance trendline(currently located at around $7300) then up we go.
The next setup is also showing a horizontal channel in which Bitcoin is currently being traded where the support level is denoted by $7150 and the resistance level by $7300.
What else could definitely be worth reading:
AAaannnd that’s a wrap for today! Please always keep in mind that absolutely NO part of this write-up is trading advice and you should always trade at your own risk. We would continue to bring more such analysis to you every day, till then share and subscribe to our newsletter! and happy trading! Ciao!
