It’s about speculation, and not holding for the future like some people will tell you. 

The BTC/USD continues to go sideways as the market seems content to hang around the $21,500 level. There’s no real volume, nor is there any interest in owning Bitcoin now. It’s times like this where accumulation starts to happen and therefore big profits can be made, assuming that you can wait to get paid.

This is not to say that we are at the bottom, but I do know that a lot of longer-term addresses are starting to accumulate again, suggesting that we might be near an accumulation phase. If we break down below the recent lows from a couple of months ago, then it’s likely that we drop down to the $12,000 level. That’s very possible given the financial situation around the world. After all, Bitcoin has not decoupled from the S&P 500, and more specifically the NASDAQ. The NASDAQ is all over the place due to concerns about the Federal Reserve tightening monetary policy, and therefore so is Bitcoin.

What Really Matters in This Market

• Keep in mind that institutional money is what pushes Bitcoin around these days, so it’s going to act more like a commodity than anything else.
• Whether or not it has any real-world use is completely irrelevant to most people who trade it, nor does it matter to them who controls everything.
• What matters to them is whether they can make money trading it. That’s the very essence of crypto that we have seen so far, people trying to make money.

While this is not necessarily an indictment of crypto itself, it does give you an idea of the mentality behind this market. It’s about speculation, and not holding for the future like some people will tell you. Yes, there are maximalists out there, but they are such a small portion of the market that they hardly move the needle. At this point, every time we dip a few thousand dollars, they will be longer-term buyers and investors willing to get involved, because they are waiting for the next great bull market. I believe it’s too early to see that, but as soon as the Federal Reserve pivots, that’s where we start to see Bitcoin and other risky assets such as crypto in general start to take off. That will be your cue that the next bullish run has started.

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Bitcoin is still finding buyers close to $20k.

Previous BTC/USD Signal

My previous signal on 18th August was not triggered as there was no bullish price action when the support levels which I had identified were first reached that day. Unfortunately, the high of the day was just below the nearest resistance level.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be taken prior to 5pm Tokyo time Friday.

Long Trade Ideas

• Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $20,754 or $20,381.
• Put the stop loss $100 below the local swing low.
• Move the stop loss to break even once the trade is $100 in profit by price.
• Remove 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to ride.

Short Trade Ideas

• Short entry after a bearish price action reversal on the H1 timeframe following the next touch of $22,713, $23,163, or $23,609.
• Put the stop loss $100 above the local swing high.
• Move the stop loss to break even once the trade is $100 in profit by price.
• Remove 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to ride.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

BTC/USD Analysis

I wrote in my previous analysis on 18th August that the price of BTC/USD was prone to a bearish reversal, with the resistance level at $23,609 looking attractive for a short trade as it had become likely “role reversal” resistance so would probably be likely to hold if reached. I was also interested in a long trade from the support level at $22,713.

Neither of these opportunities set up, with the high of the day unfortunately just a little below $23,609.

As it happened, during the later Asian session, the price broke down from its medium-term bullish price channel, finding a bottom just above the support level at $20,754.

The price has been consolidating since then above this supportive area, making a weakly bullish pattern of higher lows.

The price has room to rise and seems unwilling to fall further, with no key resistance levels overhead until $22,713.

Traders today might look to buy a bullish breakout above $21,900 / $22k, or alternatively hope for a retracement to the support level at $20,754 and go long following a bullish rejection there.

With today’s Jackson Hole symposium, it feels like we may see a major reversal in the US Dollar and a boost for riskier assets, which suggests upward price movement for Bitcoin.

Concerning the US Dollar, there will be a release of Preliminary GDP at 1:30pm London time, followed later by the start of the Jackson Hole symposium and Fed Chair Powell’s speech.

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Bitcoin is gently selling off on deteriorating risk sentiment.

Previous BTC/USD Signal

My previous signal on 8^th August was not triggered as there was no bullish price action when the support levels which I had identified were first reached that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 5pm Tokyo time Friday.

Long Trade Ideas

• Go long after a bullish price action reversal on the H1 timeframe following the next touch of $23,028 $22,713, or $21,449.
• Place the stop loss $100 below the local swing low.
• Adjust the stop loss to break even once the trade is $100 in profit by price.
• Take off 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to run.

Short Trade Ideas

• Go short after a bearish price action reversal on the H1 timeframe following the next touch of $23,609 or $24,466.
• Place the stop loss $100 above the local swing high.
• Adjust the stop loss to break even once the trade is $100 in profit by price.
• Take off 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to run.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

BTC/USD Analysis

I wrote in my previous analysis on 8^th August that the price of BTC/USD was continuing to rise gently and be held by a wide bullish price channel.

I thought that the support level I identified at $23,585 would likely be pivotal over the day.

These were good calls, as once the price broke below $23,585 it continued to fall by a considerable distance. Ten days later, the price is still trading within the same gently rising price channel but has sold off since reaching the big round number at $25k.

The selloff in Bitcoin is probably getting some tailwind from, the recovery by the US Dollar and the decline in risk sentiment following the release yesterday of FOMC meeting minutes.

The resistance level at $23,609 looks attractive for a short trade as its clearly become “stairstep” resistance so will probably be likely to hold if reached. I would want to see a rejection of the level from below and a clear bearish reversal before entering. I would be comfortable trading short today despite the rising price channel.

If the price reaches the support level at $22,713 that could be significant as it is close to the bottom of the price channel, so there is scope to hope for a medium to long-term bullish price movement beginning from a firm bullish bounce there.

https://www.tradingview.com/chart?symbol=COINBASE%3ABTCUSD

Concerning the US Dollar, there will be a release of the Philly Fed Manufacturing Index at 1:30pm London time.

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The market could also be one of the first places money comes flying out of it we have issues with risk appetite and see things like stocks get hammered.

• The BTC/USD currency pair pulled back a bit on Tuesday as we continue to see Bitcoin pullback from the crucial $25,000 level the $25,000 level.
• Bitcoin has been rather resilient as far as selling pressure is concerned, but at the end of the day, I think we got a scenario where a pullback was necessary.
• The $22,500 level underneath is significant support, so it is possible that could be where we are aiming to get to.

If we were to turn around a break above the $25,000 level, that would obviously be a very bullish sign because we would be clear in an area that has already shown itself to be supportive previously and resistant now. The market breaking above that level also breaks above the top of a shooting star, which is also a very bullish sign as well.

Hoping for Hawkish Monetary Policy

Keep in mind that there’s a lot of speculation as to what the Federal Reserve is going to do and what monetary policy is going to be like going forward. If they do in fact have to become a little bit less hawkish, that is good for Bitcoin because it means that risk appetite will return. Remember, Bitcoin is about as far out on the risk appetite spectrum as you can get, so you will need to have other risk appetite-related markets rising as well.

The market could also be one of the first places money comes flying out of it we have issues with risk appetite and see things like stocks get hammered. In fact, it’s worth noting that the correlation between stocks in the United States and Bitcoin has been very strong over the last year or so, and because of this you need to be cognizant of what’s going on in those markets as well.

You should also probably pay close attention to the bond market in the United States right along with the US dollar because yields and the greenback work in direct competition with the Bitcoin market, which is now a much more mature market than it had been previously. There are a lot of institutional players in these markets now, so they will behave more like traditional assets. Gone are the days of 15% gains, as institutional players don’t like that type of noise. The good part of that is also 15% losses are probably gone as well.

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I think you need to look at this through the prism of buying dips as an investment.

• The BTC/USD currency pair rallied ever so slightly on Friday as we continue to grind back and forth.
• That being said there is a little bit of a “buy on the dip” mentality at the moment, but not necessarily anything that I would consider to be explosive or momentous.
• I think at this point in time it’s likely that we could get a little bit of a pullback, but I think also that there is a certain amount of accumulation going on which will probably be well for the long term.

Technical Analysis

The 50-day EMA sits just below the $22,000 level and could offer a bit of dynamic support. If we were to break it down below there, then it’s obvious that it would be a negative turn of events. Breaking down below all of that opens up the possibility of a move down to the $20,000 level. The $20,000 level is a large, round, psychologically significant figure that a lot of people will pay close attention to and breaking down below that could really open up the floodgates.

The alternate scenario of course is that we break above the $25,000 level, perhaps reaching the $28,000 level. The $28,000 level extends to the $32,000 level and should be a massive resistance barrier. If we can clear all of that, then it would obviously be a change of trend, and at that point, I think that Bitcoin could go much higher. If we were to see Bitcoin break above there, we would probably start to see some of the smaller markets react and rally as well.

A lot of this will come down to the US dollar, which is starting to try to strengthen itself again. A lot of people are banking on the Federal Reserve loosening monetary policy, and therefore boosting risk appetite. If the Federal Reserve starts to get tight again, that could have people running away from Bitcoin as well. Either way, I think you need to look at this through the prism of buying dips as an investment, but if you are a shorter-term trader, you should probably continue to go back and forth and try to build up a sizable account through a range bound system that is focused more on a lower timeframe going forward.

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We are in the midst of “crypto winter”, so you should be aware of the fact that the market may be a little lackluster.

• The BTC/USD currency pair went back and forth on Wednesday as it looks like we are not quite ready to go anywhere.
• That being said, it’s worth noting that we have been consolidating rather tightly, so one would think that sooner or later we should get some type of momentum into this market.

Support at 50-Day EMA

Underneath, the 50-day EMA sits just below the $22,000 level, an area that has been important previously. The 50-day EMA should offer dynamic support, so if we were to break down below that level it’s likely that we would see Bitcoin go lower. In that scenario, I would anticipate that the market probably falls down to the $20,000 level. That’s an area that I think will attract a lot of attention, not only from a structural standpoint but also quite a bit of attention due to the psychology of that big figure.

On the other hand, if the market were to turn around a break above the $25,000 level, that would be very bullish for Bitcoin. In the short term, I could see this market going to the $28,000 level. The $20,000 level should be significant resistance, and I believe that resistance will extend all the way to the $32,000 level. If the $32,000 level was broken to the upside, it’s at that point that I think we would have entered a new bull run.

In the meantime, I anticipate a lot of choppy and sideways action, because there’s no real catalyst for Bitcoin to go higher. Ethereum does have a little bit of a catalyst, and that could cause a little bit of a knock-on effect over here, but I would not hold my breath for that. With the upgrades coming to the Ethereum network seemingly on time, we have seen Ethereum outperform Bitcoin. The market is likely to continue seeing noisy behavior, and you need to be cautious about your position sizing. However, if you are a longer-term trader, then you may look at each dip as a potential opportunity to pick up a bit of Bitcoin, and the anticipation of another bullish run. That being said, we are in the midst of “crypto winter”, so you should be aware of the fact that the market may be a little lackluster.

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We are essentially in “crypto winter”, so I do believe that we still have plenty of time to build up quite a bit of a position for the next major rally.

• The BTC/USD currency pair fell a bit on Tuesday as the market continues to pay close attention to the $24,000 level just above.
• That area has been resistance several times, so it makes sense that we will continue to see selling pressure.
• Even if we were to break above that, it does not necessarily change the trend of Bitcoin, as there are plenty of resistance barriers above that you would have to take a look at.

If the market were to break above the $25,000 level, it would have to deal with the $28,000 level. The $28,000 level was the bottom of overall consolidation previously, so it does make sense that you would look at that as a major barrier. That barrier then would be where I determined that the trend has changed. We would have to get above the $32,000 level to confirm it for a longer-term move.

Exercise Caution

This is not to say that you cannot be a buyer of Bitcoin on dips, but you need to be cautious about how you jump into the market. You don’t want to buy all of it here, because if we pull back from here, it’s likely that there will be buyers from time to time. I do believe that most people think that Bitcoin is going to continue higher and see more use over time, but that does not necessarily mean that it has to be reflected in the price right now.

The 50-day EMA currently sits at the $23,000 level and is rising. However, if we do break it down below there, then it’s likely that the market could go to the $20,000 level. The $20,000 level course will be a large, round, psychologically significant figure. Breaking down below that area then opens up the possibility of the Bitcoin market dropping down to the $12,000 level. That’s where the entire move higher began, and therefore it would be a complete “round-trip.” At that point, I think we would go sideways for the longer-term, and probably open up the possibility of a longer-term base-building opportunity. We are essentially in “crypto winter”, so I do believe that we still have plenty of time to build up quite a bit of a position for the next major rally. That being said, look for value and take advantage of it.

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If you are longer-term, you probably have a nice opportunity to pick up Bitcoin at lower levels.

• Bitcoin markets initially tried to rally during the trading session on Thursday but then gave back gain.
• The market should pay close attention to the $24,000 level above, as it is a large, round, psychologically significant figure.
• The 50 Day EMA underneath offers quite a bit of support and is starting to curl higher, so I think that given enough time it’s difficult to imagine that there won’t be at least some type of technical support there.

Bitcoin Breakdown & Breakout Scenarios

If we break down below the $20,000 level, then we could see the bottom fall out of Bitcoin, perhaps opening up a move down to the $12,000 level. Somewhere near the $12,000 level would be an area where you would anticipate seeing a significant amount of market never come into place as it is an area that kicked off the most recent bullish market. By breaking above the top of the $12,000 level, we saw a lot of people go to the upside. On the other hand, when we come back down there somebody you more likely than not be willing to support the market based upon “market memory.”

A break above the $24,000 level, will open up the possibility of a move to the $20,000 level. The $20,000 level extends all the way to the $32,000 level, which is a massive barrier for the next uptrend to overcome. Ultimately, I think this is a situation where we continue to see more negativity, especially as we continue to see so much in way of uncertainty economically. The uncertainty leads to a lack of risk appetite, which is a major detriment to cryptocurrency in general.

Bitcoin will be the first place that money goes to, but ultimately it is going to be sensitive to risk appetite, so once we see Bitcoin turnaround, you may see some of the other markets follow along. It is because of this that even if you are not trading Bitcoin yourself, it is worth paying attention to if you buy anything crypto-related. As things stand right now, we are more likely than not going to continue to see a lot of sideways behavior, and therefore it’s likely to see more of a range-bound type of trading system employed if you are more or less a short-term trader. If you are longer-term, you probably have a nice opportunity to pick up Bitcoin at lower levels.

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In this environment, it’s difficult to risk a lot of money on any one particular asset, let alone something with the volatility profile of Bitcoin.

• The BTC/USD currency pair bounced a bit Wednesday to show signs of life, gaining over 2%.
• That being said, we still face a lot of noise just above, and in particular at the $24,000 level.
• The $24,000 level is an area that has been difficult to get beyond for a while, so it’s not a huge surprise to see that this market has not necessarily taken off to the outside during the day.

Bitcoin Choppy and Following Risk Appetite

The 50-day EMA sits at roughly $21,000 and is rising, so that could be dynamic support on any type of pullback. Bitcoin has had a little bit of a resurgence over the last couple of weeks, but it is choppy to say the least. In fact, it almost looks like we are trying to form some type of basing pattern, so while it is bullish in its intention, that does not necessarily mean that we get some type of big rally. It’s possible that we could be in a major accumulation phase, but it does remain to be seen whether or not that’s going to be the case. After all, Bitcoin is pretty far out on the risk appetite spectrum, and risk appetite is somewhat all over the place currently. In this environment, it’s difficult to risk a lot of money on any one particular asset, let alone something with the volatility profile of Bitcoin.

If we do break down from here, the $20,000 level will be crucial support. Breaking through that could be quite a bit of a blow to the Bitcoin traders out there, perhaps making them scramble and kicking off the next wave lower. It’s not necessarily going to be an easy move or trade to get beyond, but I do think that given enough time this is a market that will have to make a bigger move. If we break it down, then $12,000 could be your target. If we rally from here, the $28,000 level will be the beginning of significant resistance it extends to the $32,000 level.

Breaking above the $32,000 level then allows for a longer-term move, perhaps to the $40,000 level. I don’t see that happening anytime soon, but if it does, all you can do is follow the market because at the end of the day, price is everything.

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I will more likely than not be looking at a breakdown to start buying.

The Bitcoin market rallied ever so slightly Wednesday as we continue to see a lot of noisy behavior. That being said, the market is likely to be very noisy, to say the least, therefore I think volatility is something that you will need to get used to. The 50-day EMA sits above and is drifting lower. The market is likely to see dynamic resistance due to that, and it is possible that we could see sellers come back into the market at the first signs of exhaustion. Furthermore, we need to pay close attention to the recent high and the $24,000 level.

If we were to break above that high, then it’s possible that we could go looking to the $28,000 level. The $28,000 level is the beginning of the next major resistance barrier that extends to the $32,000 level. If we break above that level, then it’s possible that we could go much higher. Having said that, it’s very likely that we are going to see exhaustion before it’s all said and done. Signs of exhaustion will be looked at as a potential opportunity because quite frankly Bitcoin still has a long way to go before it changes its overall attitude.

With the central bank in the United States being so tight, as well as many others, it makes it very likely that crypto markets around the world will continue to suffer. While Bitcoin is the leader, the reality is that it will just be “less bad” than many others. If we break down below the $18,000 level, this is a market that could fall apart rather quickly, perhaps reaching down to the $15,000 level, perhaps even down to the $12,000 level.

The $12,000 level underneath has been an important level multiple times over the last several years, so I think that you could have a lot of people looking to get involved and build up a larger position. I do think that’s where the monies are to be made next time, building up a longer-term position for the next pump higher. Even though it’s been relatively bullish over the last 24 hours, it’s difficult to think that we have changed attitude completely, so I will more likely than not be looking at a breakdown to start buying.

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