Bitcoin – Moving Average Crossover Finding the Bottom

Overview:

The Death Cross has come and gone, and if you are one of the people that sold the cross over you sold at or near the bottom.   We mentioned that this is an area to buy not sell and though we can always go lower, selling these types of signals often result in selling at the bottom.   This is why Wall Street posts these types of indicators.   Not to provide insight and educate the retail trader in how to make money, but to invoke fear.    Wall Street has its own set of morals and it is not in the favor of the retail investor.

“It’s morally wrong to allow a sucker to keep his money”. W.C. Fields

Technically:

 

We tested the 6427 level and quickly pulled back from this as buyers bought the dip.   I mentioned I wanted to see two closes above the 7400 level before entering a trade only because I already have two active trades at higher levels.   Keep in mind we have had two successful trades that have reduced the overall position average but we do not want to give any gains back, so I am being cautious.   If you do not have a position I would be looking to add a small position (1/3-1/4) on any pullback.   This reduces risks and allows you to ease into the market.   Let me be clear “IF YOU DO NOT HAVE A CURRENT BITCOIN POSITION”.

But most of us do, so what levels are we looking at.   The first bullish hurdle comes at the 7480 level or the 0.382 retrace of the previous bearish swing.   A breakout would signal a potential trade setup with an initial target of 9755.   We would likely see resistance at the 8127 level or the 0.618 retrace of the bearish swing.   I am also looking at a close above 7400 where I would add on a pullback and reversal signal.   This is the ideal setup.

A break of 7000 would bring back into play the 5865-6615 support levels, where 6079 support, short covering and a likely bounce.   This area is just above the previous low back in February.   There are a lot of support and fibbonacci levels in this area which is why it is the likely area for a double bottom and reversal IF we retest the zone.   The bears need to break the 7000 support level to see the possibility of a lower low, and with short interest being near all time highs this may be too crowded of a trade to add many more positions.   We more likely see a break of the 7480 level causing a short squeeze, and if you are still short this market you are now walking around a fire with gasoline.

Summary:

After the hype of the Death Cross it appears that Bitcoin may be rising from those calling death to crypto.   Is this the resurrection?   Only time will tell but we have a clear wave count on many coins and this could be the buying opportunity of 2018.   I am looking to buy bitcoin on a pullback along with several other coins like OMG NEO and ETH which are setting up nicely. We will post trades as we update.   At this point the bad news is well priced in.   Short of governments outlawing cryptos the market is close to or has found its bottom.

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