Thursday, 18 January 2018

Bitcoin Next Price Targets (Jan 2018) - Part 2

In my previous post Bitcoin Next Price Targets (Jan 2018), i pointed out how important level marked 'A' is.

Below is the chart i included in that post.

Bitcoin price chart showing support level and price target
(Click chart to enlarge)

What i missed was one more reason why level 'A' is important. In fact, it's a 50% Fib retracement level. See chart below.

This important level 'A' where the 3 pivot levels of 50% Fib retracement, 100D MA and bottom of falling channel (in purple) intersect. The more the number of important levels intersect (in this case, 3), the stronger the support/resistance. This is evidently true in this case.

Bitcoin price chart showing Fib retracement level
(Click chart to enlarge)

The green up arrow shows where 50% Fib and 50D MA meet on 22 Dec 2017.

The vertical rectangle encloses the 3 candles that all close on the day above level 'A' (approx. $11,000 to $11,200).

For the last 2 days, i watched and wondered if this support would break with the negative news headlines. Especially on 17 Jan, where it dips very far below this support. Evidently, the level was very strongly and successfully defended (for now).

Given the evidence of this very strong support at this level, i'm now confident enough to enter a long trade today (18 Jan 2018).

Clearly, you want to put your stop at a certain percentages below this important level. The exact percentage is up to your risk tolerance, and your trading time-frame.

If this support breaks down (which i don't expect), the next level is about $9,200 (this level was already touched and bounced off strongly on 17 Jan). This is 61.8% Fib retracement level (see chart).