Trading Bitcoin: $7.2k Next Week

$7.2k Next Week

On the daily chart above, Bitcoin is on a red 6 of 9 candle. Furthermore, price has broken slightly below the no trade zone and additional downside price action is looming. Yesterday, price presented us with a false breakdown, as Bitcoin fell to $7.9k then quickly rebounded. Now, Bitcoin is trading slightly below the no trade zone at a price of $7.9k. Most notably, Bitcoin must remain above the $8k support level in order for the bulls to have a chance. If $8k begins to act as resistance this weekend, look for a decline to $7.2k on next Monday, Oct 21st.

4 Hour

Bitcoin is now on a red 3 on the 4 hour chart above. In yesterday’s article noted that Bitcoin was mildly bullish on the 4 hour chart. The reason for this was because price formed a green 2 above a previous green 1 on the sequential indicator. However, price was unable to break above the moving averages, which are serving as resistance. For now, the 4 hour chart remains neutral-bearish.

Weekly

On the weekly chart above, Bitcoin is now on a red 8. Next week, price will give us a red 9 which is indicative of a larger move or a trend reversal. In this case, it seems unlikely, based on current indicators, Bitcoin will undergo a trend reversal on the next weekly candle. In fact, it is more likely we will see a large bearish engulfing candle next week. This candle would likely take us down to the 50MA (grey) and 128MA (green) support level at roughly $7k.

Conclusion

Prepare for the worst and look for a large decline towards the start of next week. The daily and weekly sequential indicator may hit a red 9 on Monday. Therefore, watch diligently for a large move and be ready. As a trader, a prolonged sideways trend can bore you. Nevertheless, you cannot be hesitant like a dear in headlights. Have a plan for every outcome whether price increases, decreases, or remains flat. Happy trading!