Bitcoin technicals: Guess where bitcoin bounced?

Anyone? Anyone?

In my prior posts on Bitcoin, I have relied on technicals only. Why? I don't know the fundamentals that propel this pair. Yes... there may be a China story. There are others who chime in with things like some protocol was voted on and passed by the miners (they might as well be speaking Chinese when they talk about that).

At the end of the day, this instrument is highly speculative. In a highly speculative instrument (you can say highly leveraged market like the forex market), you better use something to define and limit your risk.

For me, that includes the 100 and 200 bar MA, trend lines, fibonacci retracements. They should not be ignored.

So looking at the 5 minute chart, the price of bitcoin fell below its 100 and 200 bar MAs and kept a lid on the pair near those MAs on Thurday and into today (see blue and green lines).

The price tumbled earlier today, and formed a double bottom near 4017. The market rallied from there to the low from Thursday, stalled there (see solid red line), then rose above that line which also happened to be the 200 bar MA (green line). The buyers - at that point - came in and pushed the price even higher. We currently trade near the highs for the day.

The 100 and 200 bar MA are now close risk for traders. That is the view from the 5-minute chart.

What about the view from the hourly chart?

Looking at the hourly chart below, the blue line represents the 100 hour MA. When the market was falling earlier today, we know from the 5-minute chart that the price formed a double bottom. From the hourly chart we see the reason the market stalled. The pair was approaching the 100 hour MA. That MA came in at 4013 at the time. The low reached 4017. That is close enough for this high flying cryptocurrency. The price has bounced to above 4200.

So where did the buyers stick a toe in the water?

Against the 100 hour MA.

Why did the fall stall there?

Because traders could define and limit risk against the level.

What would have likely happened if the MA was busted?

The price likely would have gone down further with the 200 hour MA the next target.

You need to live and die by the technicals in highly volatile instruments like bitcoin. Traders who followed the blue and green lines, likely did ok.....