Hello traders. Today I’m going to give you an update on bitcoin and where the price is heading next. My writing will pertain to a long term perspective.

There are fantastic opportunities coming for Bitcoin that makes it a fundamentally strong investment at these low price levels. Following the news, and keeping eyes on, these projects that are coming to bitcoin might give you an idea. I’m trying to keep this unbiased. It is also worth keeping in mind that this is not financial advice. Do your own research and, if you decide to invest or trade, be sure to keep in mind that those decisions are your own.

Overall sentiment and atmosphere is very bearish. Main reason for this is that a lot of people bought near the all time high, expecting high returns, but each time Bitcoin showed signs of reversing its downtrend, the resistance was broken and it dropped even lower. Now is likely a good buying opportunity because when overall sentiment is pessimistic, markets are likely to recover soon after. This is known as “the herd effect”, defined as a period when the majority of people follow a bit behind the trend, all of whom have taken some losses.

Anyways, let’s get technical.

In both charts (Linear & Log) – both downtrend lines got violated and pierced through. The linear chart managed to show signs of recovery back above the uptrend line after bouncing off of a strong support level of $6,800.

# The linear chart (Longer term) is showing us signs of recovery on the daily timeframe.

1) StochRSI has taken oversold position, pointing upwards and has a plenty of space to move upwards.

2) RSI agrees with StochRSI when it took oversold position, bounced and now is pointing upwards

3) Hammer pattern which can be found at $6.800 level.

The price is heading towards the first resistance zone which has acted previously as a support area. This area should not be neglected as the price might have a minor pullback from this level. More details on this down below.

Confirmations are very important when it comes to trends. The daily candle needs to close above of the $8,000 resistance level to give a bullish confirmation that the price is moving further upwards, or it needs to break above of it with force to indicate that buyers are back in the game.

To see “full bull mode engaged”, the price needs to breach the second resistance level which can be found in between the $9,000 and $9,500 level. This is why it’s crucial to follow the price movement near the first resistance zone and see which direction it will take from there. It’s worth noticing that after huge downtrend, recovery should not be expected to happen quickly. Recovery from a bear trend takes time and will gradually turn in to a bull trend.

The 4h chart (medium term) is showing signs of exhaustion. Minor pullback should be expected soon.

1) StochRSI + RSI takes overbought position

2) Hovering close to resistance zone ( formed by $7,500 level and $8,000 level) where it’s likely to have minor pullback before moving back up again.

3) No bearish divergence other than on the 1h chart (not reliable / confirmed yet)

Conclusion:

The daily and fundamental aspects of bitcoin are showing that, with these prices, it’s likely a good opportunity to open longer term trades. If Bitcoin does manage to break above of the first resistance zone, then there are two ways to enter this breakout:

1) The breakout

2) The retest of the breakout

For the short term traders, minor pullback should be expected and for the longer term, it’s starting to look good.

DISCLAIMER:

Please be aware this is not financial advice. You are responsible for your trading and investing decisions. It is highly recommended to do your own research before investing anything.

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