Yesterday I discussed an update on a trade idea for Ethereum that I’ve been talking about this week. I want to do an update on that first and then let’s discuss Bitcoin.
1. This is where we were watching price yesterday, we wanted to have a bullish bias when it crossed the midline. Not only did it cross that midline, but we blew through the 458.87 resistance area. At the time of writing this article, we are north of 7% on Ethereum (the ETHUSD pair).
2. We want to see a close above 458.87. If it does hold, the next thing we want to see is a daily candlestick which stays entirely above 458.87. If that happens, we might as well consider 458.87 the new support zone.
Bitcoin setup and observations
It’s Friday and in almost exactly 48 hours, the CBOE will open the first Bitcoin futures contract. On Sunday, December 10th at 1800 CST, cryptocurrencies as we know them will change. The price action yesterday was nothing short of crazy and amazing. In 8 days, we have gone from $10,000 to touching nearly $20,000. But let’s look at what is happening using a different form of analysis.
1. This chart may look familiar to some, but for others what we are looking at is a tool in TradingView called a Gann Square. It is not an actual Gann Square. But that really doesn’t matter, because the way to use this tool is what’s more important (well, not for me, I’m a Gann trader so it bothers Gann traders like me. 🙂 is how to use this tool.
- Each arc represents a period of support/resistance. So does each horizontal and vertical line which are Fibonacci levels in price and time. What is interesting is where price stopped (#1) right at this level.
2. The top volume and price trading has been in this area. What we can see is that price has struggled (something rare for Bitcoin) to maintain it’s move above this arc. If price breaks and closes below this arc, look out below (although Bitcoin has just been bought up, we’ll see).
3. This angle represents the 2/1 angle, which means that if price moves above it, then price has been moving too fast and is well ahead of time, expect pullbacks when price travels above that angle.
What to look for
For almost every scenario in Bitcoin, Ethereum and every cryptocurrency, Sunday is going to be an excited and nail-biting day. In fact, this entire weekend is going to be very interesting to see how Bitcoin consolidates and/or trends before Sunday. I’ve been trading as a career for some time and there are similar situations like this that I have observed at various times. I don’t trade them. I truly believe that trading or having open positions during this weekend and into Sunday is akin to gambling. And gambling is not speculation.