Trading Bitcoin: END OF BULL MARKET??

END OF BULL MARKET??

In yesterday’s article, we recapped the long trade which was initiated by the green 2 closing above a green 1 on the daily chart. If you took this position, you had the opportunity to take a 7% profit. However, despite the bullish technicals, Bitcoin dropped by roughly 10% yesterday. At this point, you should have set a stop loss, taken profit, or at least broke even.

On the 4 hour chart above, Bitcoin is on a red 7 of 9 candle. Bearish momentum took us down to $11.1k, but price quickly bounced off the 128 MA (green). For the moment, Bitcoin has found support at $11.5k.

While yesterday’s decline may have shaken out many longs, the technical structure of the trend is still bullish. For instance, Bitcoin recently made a higher high when price increased to $13k. Additionally, Bitcoin has continued to create higher lows ever since topping at $14k. Therefore, until price creates a new lower high, the structure of the trend remains bullish.

Daily

Bitcoin is on a green 4 of 9 candle on the sequential indicator above. According to sequential theory, the trend is still bullish for the next five days. Also, Bitcoin’s daily RSI is still in a bullish divergence. However, if RSI breaks below its previous low, it may be time to reevaluate.

Macro Trend Lines

Traders and analysts across YouTube have been calling for a 30-40% pullback. When analyzing Bitcoin’s macro trend, if the parabolic trend line is broken, it is very plausible that price will retrace back to the $6k – $9k price region. However, its important to note that as time passes, the trend line price level increases. Therefore, price action and time both need to be considered.

Cryptocurrency News

The SEC recently approved the first regulated security token.

Many have speculated that security token offerings will be a bull market catalyst similar to how ICOs were a bull market catalyst throughout 2016-2017. This is a much needed step in order to bring clarity to US cryptocurrency regulations.

Conclusion

It’s not the end of the bull market. Although Bitcoin has seen a 15% pullback in the last two days, the structure of the trend remains bullish. Until a break below support at $11k, the trend is bullish. Resistance remains at $12k with the strongest support level at $9.5k.