Bitcoin (BTC) bear slammed as buyers support price
Friday’s (January 10th, 2020) session closed extremely bullish. Continuation moves higher likely.
Bitcoin’s Bullish Engulfing candlestick
Friday caps off one heck of a week. The stock market made new all-time highs before selling off during the final trading hours of the day. Oil nosedived, dropping -6.21% for the week, but more than -10.63% from the weekly high to the weekly low. Gold tagged the $1600 value area for the first time in nearly seven years. Bitcoin still has a couple of days before its weekly candlestick closes, but Bitcoin is currently up +11.82% for the week. The daily candlestick for Bitcoin is extremely bullish. The pattern that Bitcoin has created for Friday’s candlestick is a bullish engulfing candlestick. The bullish engulfing candlestick pattern is defined by the candlestick having a higher high and a lower low than the prior candlestick. The body of the candlestick is also higher than the body of the prior candlestick. The bullish engulfing candlestick is one of the strongest candlesticks that exist – it is a strong indicator of bullish pressure and continued bullish momentum.
The close of Friday’s candlestick is interesting. The high of the day was also the close of the day – but the close of the daily candlestick was interesting. Bitcoin closed right on top of the 2/8th inner harmonic at 8192 (red horizontal line). The 2/8th inner harmonic level was where Bitcoin was halted against when it closed on January 7th. We’ve talked about the 2/8th inner harmonic frequently over the entire week. It was expected that this level would turn into the first resistance level. With these harmonic levels, the more frequently they are tested the weaker they get. This is contrary to traditional horizontal support and resistance levels based on prior traded price levels. I’ve found that if there are more than four or five tests in a ten-day period, the level is about to be broken.
It is also important to recognize that Bitcoin just moved into a new Law of Vibration cycle on January 5th. What is very interesting about the Law of Vibration cycle is how often Bitcoin treats them as the catalysts for new trends. The prior Law of Vibration cycle began exactly on the June 2019 high and then traded lower for the entire 192 days of that cycle. The Law of Vibration cycle before the June 2019 high was the 2018 low in December. Those past two cycles should tell us something. The Law of Vibration cycle from December 15th, 2018 to June 25th, 2019, started with a swing low and ended at a swing high. The Law of Vibration cycle from June 26th, 2019 to January 4th, 2020, started with a swing high and ended at a swing low. Bitcoin, more than almost any other instrument I’ve traded, follows the pattern of moving to the opposite swing from the beginning to the end of the cycle. There is no reason not to predict that this behavior will again be repeated on Bitcoin’s chart.