March 28, 2024

Diamonds are born under pressure + technical analysis from November 29, 2021

Shouldn't Bitcoin have reached $98k by the end of November? Didn’t the crypto community promise us afterstrongest October even greater growth in November andepoch-making, cosmic-scale trend in December? Weren't we told that the economy will reopen, spending will increase, fears about COVID will subside, and the money "printer" will eventually be ready to go again? Wasn't the end of the year supposed to change everything?

Instead, the index arrow of fear and greedfor Bitcoin is close to the “extreme fear” area, the price is falling further from $98 thousand, the dominance index is also decreasing, new COVID “variants” are emerging, the likelihood of new lockdowns is growing and the mood in global markets is close to panic.

And if this is not a purchase opportunity, then I don't even know how else it might look.

As Baron Rothschild once said, "buy when there is blood on the streets, even if it is your blood."

The market did not give us such discounts this time,as in March 2020, but the situation is very similar. Few investors had such iron confidence and foresight to buy in that "covid" panic. In fact, Wall Street funds performed poorly after March 2020 because they did not buy and continued shorting in disbelief in the market recovery. Those who had the courage to buy on that dip were richly rewarded. As General George Patton said, "under pressure, diamonds are born."

Today we have a similar fall and are armedpast experience - the market gives us a chance, and it depends only on us whether we take advantage of it. I don’t call it an exact bottom, although I do believe that we are close to it. I am simply saying that what we are seeing is not new and that historical data suggests that the market will eventually rebound.

Markets are always recovering.

I've been saying for a long time that the longer this goes onrally, the more explosive it will be, and the higher the price will rise. Each bull market lasted slightly longer than the previous one. Finishing before December would be very early. It is possible, yes, but less likely than continued growth. But if the market ends up giving us more pain in the lead up to Q1 next year and it extends the bullish macro trend over time, then so be it - I'm confident it will only take us higher.

Bitcoin technical analysis

Bullish divergences are great.It's nice to see how my ideas have been implemented since last week, as is usually the case with divergences. When there are bullish divergences on almost every timeframe, and even originate mainly from the "oversold" zone, this almost always means the formation of at least a local bottom. Let's hope that this will eventually give us a full-fledged reversal.

Weekly schedule

Chart executed in TradingView

$53,350 Close enough.

As I have already said several times, when everythinglook at a certain defining level - like ~$53 thousand - then the market will either turn around before reaching it, or will break right through it and go much lower (as is the case with the wicks at $42 thousand).

Weekly close is actually bullishpotential: hammer candle almost touching support. The two previous candles also had long wicks, indicating demand in the ~$55K and below area. This picture doesn't give me much concern.

Daily chart

Chart executed in TradingView

Bitcoin regains $56,425 as supportand is potentially poised to make a larger low in the series of big highs and big lows that define the structure of a bull market. A local larger maximum here would confirm a new larger minimum in the macrostructure. The price is still trading below 50MA, which is normal after breaking this support on the daily timeframe. I think that price recovery above the 50-day MA for many traders will signal the completion of the bottom. Last time, such a recovery took almost two weeks. Here, by the way, you can clearly see how close the price came to the $53 thousand level.

A small note: RSI has not yet returned to the "oversold on the daily timeframe" zone. Ultimately this will happen, whether in the current decline or the next.

4-hour chart

Chart executed in TradingView

Resistance along the blue slanted linepretty strong. A small spike is seen in the trading volume when moving up, but it does not give the impression of being decisive. I would like to see volume actually turn on when price attacks this sloping resistance next time.

Chart executed in TradingView

Hidden bearish divergence is likelywill be confirmed shortly on 4-hour charts, but not on 6- or 12-hour charts. This does not matter much, it just signals that the direct action of the bullish divergence is, as if, "completed", and you need to watch for further signals, which with some probability can tell us the next move. Now that the RSI is in the "oversold" zone, it should somehow reach "overbought".

 

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