This is an odd thing to see today: A big volume and price spike higher just two days after a big volume and price spike lower. We have seen this fast of a counter price move since mid-August – and there was more volume during August than there has been in October. That drive up today has created a pretty nice breakout setup on the hourly charts.

Bitcoin

This is about as textbook of a bullish pennant that you can get. Pennants and flags always look like they’re on a flagpole. Pennants form triangles while flags form a parallel channel. For Bitcoin, we’ve got a pretty clear pennant. What is really interesting about this move is that prices have been oscillating and consolidating around the 4/8th inner harmonic of 6301.94. This looks like the precursor to a big launching pad.

 

Ethereum

We’ve got the same thing going on in Ethereum: Big bullish spike higher forming a flag pole with a pennant forming. And the zone that Ethereum is sitting around just below the minor triangle that Ethereum move below two days ago. Sitting in the 196 value area is pretty damn close returning into the 200’s.

 

Why does this matter?

For the most part, the entire month of October and even September was void of any significant responsive bullish price action. And I mean responsive bullish price action. What I mean by that is we have not seen really any strong bullish behavior that occurs shortly after a strong bear move. In fact, in all of 2018 we’ve had a fairly ‘bleh’ response to any bear moves. That’s indicative of two things:

  1. Retail traders have dried up.
  2. Traders/Investors do not see value at higher levels.

The most interesting piece of technical information that I keep harping on is the strong support level that has existed since February. I’ll keep repeating this until I’m blue in the face, but the bear market ended in April. You have to remember: Bear markets are identified by new lower lows. We have not had any new low zones since February. Yes yes yes we have traded lower, but the overall flat support structure has remained. And it has not been broken. Dumb, stupid, ignorant bears have tried shorting this market below that zone, but they have failed. They have failed all year. 270 days of bears failing to drive this market lower.

I am anticipating that the move today was the harbinger of the next expansion phase. I believe enough conditions have been met with the technicals to say this:

 

The next bull wave for cryptocurrencies starts tonight, November 1st.
(give or a take a day or two, hehe)