Bitcoin (BTC) inching towards $9k breakout
Bitcoin (BTC) continues to press towards crucial resistance levels. Near term resistance at $9k being tested.
Next stop for Bitcoin: $10,000
The blue vertical lines on the Bitcoin’s daily chart represent the end and beginning of a 192-day Law of Vibration cycle. For whatever reason, Bitcoin is very sensitive to this time cycle and responds to it with shocking accuracy. The last three prior Law of Vibration cycles have begun with Bitcoin at an extreme high/low and ended at an extreme high/low. More than any other instrument I trade, Bitcoin follows this cycle with almost creepy precision. Then again, Bitcoin is often called the perfect technical market because of how much Bitcoin respects much of the theory in technical analysis.
But Bitcoin’s sensitivity is not limited to just the time cycle, and it is susceptible to price as well. This chart is my own version and mix of Gann’s theories. Earlier this month, I wrote about the 3/8th Major Harmonic at 7562.13 being very important. I wrote that if price were to break above this value, then there were three resistance levels ahead a before Bitcoin would test the all-important 4/8th Major Harmonic at 10082.50. Those price levels are the 2/8th inner harmonic at 8192.22, the 4/8th inner harmonic at 8822.31 and the 6/8th inner harmonic at 9452.40. Bitcoin spent approximately seven trading days testing the 2/8th inner harmonic as resistance before breakout higher. The current resistance level, the 4/8th inner harmonic, is the most challenging level to cross between now and the 4/8th Major Harmonic. Today (January 18th, 2020) is the fifth consecutive day of testing this area as resistance and on shorter time frames, Bitcoin has broken out above this resistance.
The chart above is Bitcoin’s hourly chart. The hourly chart gives us a good view of how much battling has been going on around the 4/8th inner harmonic. I’ve also highlighted price action zones in green boxes to show how many bullish continuation patterns continue to develop on Bitcoin’s chart. The most interesting level is the outermost blue arc. That is the final and most extreme arc in the current square. The arcs act like a kind of ‘shield’ (think Star Trek). When price approaches are is trading near the arcs, the most common behavior is for price to move away from it. Another example is to think of the contour of the arc as air pushing price away. The fact that Bitcoin has been trading up against both the 4/8th inner harmonic and the outermost Gann arc now suggests that a breakout to the $9,000 value area – and ultimately to the $10,000 is very close. The next near-term resistance is above at the 6/8th inner harmonic at 9452.40. Expect some swift rejection at this level as this is the most reliable natural reversal pivot between two Major Harmonics. If price faces little resistance to the 6/8th inner harmonic, then we should expect a swift move to test the 4/8th Major Harmonic at 100082.50 – it is at that level that we could expect to see a minor flash crash and rejection lower, possibly to retest the 4/8th inner harmonic at 8822.31.