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Chart Of The Day: Look Out Below, Bitcoin Could Be Headed To $30,000

By Investing.com (Pinchas Cohen/Investing.com)CryptocurrencyMay 06, 2021 09:36AM ET
www.investing.com/analysis/chart-of-the-day-look-out-below-bitcoin-could-be-headed-to-30000-200577962?preview_fp_admin_1234=this_is_1234
Chart Of The Day: Look Out Below, Bitcoin Could Be Headed To $30,000
By Investing.com (Pinchas Cohen/Investing.com)   |  May 06, 2021 09:36AM ET
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The last time we wrote about Bitcoin in this column, at the end of March, we were bullish on the cryptocurrency's trajectory. Sure enough, since then, the price climbed, gaining almost an additional $8,000, or 14%. However, our outlook has now changed.

Yes, we know that crypto custody firm NYDIG just said, “Bitcoin is coming to hundreds of US banks this year." But then they would say that—their business is dedicated to Bitcoin. We're also familiar with the repeated claim that the cryptocurrency leader by market cap should hit “$1 million a coin,” but the caveat attached to that is always "eventually."

In February, even before the token hit an all-time high, shooting past $63K in mid-April, we made the counterintuitive argument that “smart money buying into Bitcoin may signal a top.” We weren't saying the digital currency couldn't go higher then (it obviously did), nor are we about to make that pronouncement now. Rather, in the current environment, competition from other, less expensive cryptocurrencies with better potential for massive gains on a percentage basis are siphoning demand away from Bitcoin.

BTC technicals are signaling demand weakness. Based on that, we're now bearish.

BTC/USD Daily
BTC/USD Daily

We have been monitoring the development, then the completion, of a rising wedge, bearish after a climactic rally. When Bitcoin couldn’t resume the same rate of ascent after the completion, demand floundered, leaving sellers with little support.

The wedge would have seen the price go back to the $40,000s but the pattern that emerged from the breakout—coupled by a return move to the wedge—puts a H&S on the table. The neckline is downward sloping, manifesting the slumping demand that couldn’t even muster a proper right shoulder. A downside breakout would target the $30,000 level.

Trading Strategies – Short Position Setup

Conservative traders should wait on a short for the price to complete the H&S pattern.

Moderate traders would short upon a bearish candle, confirming the right shoulder’s resistance.

Aggressive traders could short at will, having accepted the added risk to match the higher reward of entering a position with no confirmation, in order to make a move ahead of the market. Money management is especially crucial for higher risk positions.

Here’s an example:

Trade Sample

  • Entry: $58,200
  • Stop-Loss: $58,700
  • Risk: $500
  • Target: $48,200
  • Reward: $10,000
  • Risk:Reward Ratio: 1:20

Author's Note: The above is just a sample, not the full analysis. This trade can be approached in diverse ways, depended upon your risk aversion, budget and timing. Until you learn how to draw your own trade plans, use ours, but only for the purpose of learning, not necessarily profiting. Otherwise, you’ll end up with neither.

Chart Of The Day: Look Out Below, Bitcoin Could Be Headed To $30,000
 

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Chart Of The Day: Look Out Below, Bitcoin Could Be Headed To $30,000

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Comments (10)
OLORUNJU JOHNSON
OLORUNJU JOHNSON May 11, 2021 12:24PM ET
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Good evening
David Smith
David Smith May 06, 2021 6:00PM ET
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I don't know about that. BTC's adoption levels are not matched by these alt coins.
Pinchas Cohen
Pinchas Cohen May 06, 2021 6:00PM ET
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adoption = market saturation
David Dl
David Dl May 06, 2021 1:26PM ET
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In the crypto comunity we expect 500k at the end of the year. Just check dog .
David Dl
David Dl May 06, 2021 1:25PM ET
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Very difficult reach less than 58k havr many set orders at 58-60k
Karl Hoffman
Karl Hoffman May 06, 2021 12:29PM ET
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Having been formally trained in TA, you have to know TA is nothing more than a self fulfilling prophecy (if you convince enough followers, they'll act, making your prediction true via self-fulfilling actions).Fundamental matter, and those say BTC is seriously under valued.
Pinchas Cohen
Pinchas Cohen May 06, 2021 12:29PM ET
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Given you're formally trained, you surely know that Western TA developed in the first half of the prrvous century with the objective of recogizning accumulatoin and distribution as a defense for investors against the companies who had all the informatoin and manipulated the market.
Jsh Jsh
Jsh Jsh May 06, 2021 11:25AM ET
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BTC will go to 65K over this weekend.
Pinchas Cohen
Pinchas Cohen May 06, 2021 11:25AM ET
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Thanks for the tip.
Edward Chong
Edward Chong May 06, 2021 11:25AM ET
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wow i will sell my house now and pound on the toy. 15% profit in juz 3 days ! show me the money haha.
trevor isle
trevor isle May 06, 2021 10:52AM ET
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I wonder who is after cheap BTC...
Pinchas Cohen
Pinchas Cohen May 06, 2021 10:52AM ET
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Dip buyers?
Josh Harvey
Josh Harvey May 06, 2021 10:52AM ET
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George Sampoang
George Sampoang May 06, 2021 10:50AM ET
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Wrong! Institutions don't have the kajones to buy altcoins. BTC shorts will get Rekt eventually!
Pinchas Cohen
Pinchas Cohen May 06, 2021 10:50AM ET
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Thanks for the heads up.
Jon Cole
Jon Cole May 06, 2021 10:29AM ET
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Doge coin and etherium for the win! Bitcoin will always reigh supreme, but definitely look to other types of bitcoin for a larger return
Allen tran
Allen tran May 06, 2021 8:37AM ET
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If bitcoin down, stock market down too ?
Pinchas Cohen
Pinchas Cohen May 06, 2021 8:37AM ET
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Kwabena Sonful
Kwabena Sonful May 06, 2021 8:37AM ET
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Looks like it but i dint trust these bulls to allow . Lets see
 
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