Bitcoin back in the hands of the bears? TA at the full moon lunar eclipse
Have you noticed this UCommunity - except for two 4 hour candles on 10 June this year, Bitcoin has remained above the 200 MA on the 4 hour chart since 8 February 2019 (on Binance vs USDT). Back then price was near the very bottom of the 2018 bear market around the mid $3000 mark. Those were the opportunities to buy the dip, and we can see that now in hindsight. Prices have never been better since. But something changed over the past 48 hours. Bitcoin price has fallen and has been trading consistently below the 200 MA on the 4 hour chart since 14 July. And today, as I write this, at the full moon moment and the partial lunar eclipse of 16 July, Bitcoin has hit the wall in a crash that has sent price tumbling below $10 000 with bearish ferocity.
The bears are back in town
Since the high of $14 000 on 26 June, Bitcoin has been struggling to maintain the parabolic run up it has had all this year, since that February low. It seemed last month that the bulls had run our of steam and price began its retrace down to just below $10 000, only to make one last attempt back up to $13 000, where it faltered and now continues its steady decline back to an accumulation zone somewhere lower down. Price has been making lower lows for the past week but today on the full moon, Bitcoin has just printed a massive red candle to the downside, far below the 200 MA on the 4 hour chart. This is historic because of the aforementioned scarcity of this kind of capitulation so far below the 200 MA that had been acting as support for months – until now.
Even during the close call of mid June, price simply flirted with the 200 MA bringing all the smaller moving averages into close proximity, hugging it or dipping just below like the sun below the horizon in the north pole on a summers day, only to rise above it a moment later. Well this time the 21 MA on the 4 hour chart has come soaring down from a dizzy height, to crash headlong down through the 200 MA at an almost 45 degree angle. This is not the skimming motion of June but rather the dive bomb of a kamakazi pilot in the midst of his death roll. And it doesn’t look good.
In fact it looks scary.
1 Day chart and Fibonacci levels
On the one day chart, we can see that price has come up to the 0.618 Fibonacci level around $14 000, in relation to the high of December 2017 at $20 000 and the low of December 2018 at $3 150, and has bounced back down. The 0.618 has acted as resistance, typically so, being the Golden Ratio. Then price made a second attempt at it and fell short at just over $13 000 last week. And today the bearish weakness is revealing itself for certain. In fact on the 1 day chart, price has just dropped below the 50 MA for the first time since mid February, when price was $3 600. The bulls have been on a rampage ever since then. But today the party looks to be over for certain, based on technical analysis of the daily and 4 hour charts.
How low can we go?
The day is not over yet and price has the slim chance of pushing back up to close above the 50 MA on the 1 day chart, but I won’t be hodling my breath. The daily RSI has been on a consistent downward trend since the recent high of $14 000 on 26 June, where it peaked high up in the overbought region. The MACD has also been on a consistent and steepening downtrend since then too and the next top looks like the 100 day MA around $8 000, or if lower, then at the 0.236 Fib around $7 100. That’s my personal lowest call.
Bullish hope at the 0.382 Fib and the Golden Cross on the weekly
One saving possibility is the fact that price has found support at the 0.382 Fib level on the daily, as mentioned earlier, which may stabilize the current retracement somewhat around $9 400. And besides that, people are celebrating the imminent Golden Cross, where the 21 weekly MA moves up over the 100 weekly MA, though that is looking more and more like a flirt with possibility and not an actual consummation at this rate. We shall have to keep an observant eye on the setup this week to see if it will fructify. The possible bounce back up off the 0.382 as well as the possible Golden Cross on the weekly are the two bullish signs that this could be a minor dip before the next leg up, which is fairly likely, given that we appear to be in the official bull market that is taking us to the next ATH in the coming two years or so, of which we are already six months in.
Buy the dip with DCA
As I write this it looks like exchanges are seeing a flood of Bitcoin leaving them, heading for the doors as if the king has already left the building. If these floodgates don’t close and stem the bloodbath, then we may well have more downside to go. But remember that this retracement might only last a few days before resuming the overall bullish momentum once more, as Bitcoin gets back up on the horse, or the bull, and rides it to the moon, so have your buy orders ready to catch the dip before the opportunity is gone once again, and don’t ask me where the bottom is because nobody knows. Therefore the best option is to DCA or dollar cost average in. Buy in increments whenever you determine the bottom is in, and you will at least not miss the boat altogether. Crisis is also opportunity when you simply shift your perspective of reality for a moment.