Mon. Dec 6th, 2021

After months of quiet and frustrating trading, Bitcoin has definitely exploded on the rise this week. It is too early to say whether this is the beginning of a step to new historical highs, as more support and padding will probably be needed in order to form a good foundation to make up for the recent decline. However, it seems likely to stay out of the high range of $ 28,000 to $ 30,000 for some time.

The big break

We go back to last October, when the price exploded with respect to the reverse head and shoulders pattern 2018-2020. Graph 1 shows that the indicated positive target was achieved quickly, so it could be argued that the base has completed its work as a platform to win prices and that price action in early 2021 will turn out to be a top . However, when studying breaks in other bubble-type markets, outbreaks of similar formations tend to support a much longer rally over time than it has currently been.

Right now, things look promising, as the price has bounced back from a point where it should have found support, which is its 65-week EMA. In addition, the recent severe decline caused the long-term KST to stabilize, but it was not enough to push it down. Therefore, these two long-term indicators remain in the bullish field.

Graph 1This week’s broth

Graph 2 shows the recent action in more detail. First, a sales climax developed in mid-May. A chainsaw break occurred in mid-June. However, it was never confirmed with a positive penetration of the trend line or AM. A second chainsaw was developed early last week. This, however, has been confirmed. This confirmation materialized in a pause above the discontinuous green trend line and the 50-day MA. The volume started to kick off with the strong concentration on Monday, which is also a positive sign.

Graph 2Resistance, on the one hand, exists at the June high at $ 42,000 and, secondly, in the 200-day line zone, at around $ 44,000. Typically, a confirmed chainsaw or a false break is followed by above-average movement in the opposite direction to the break. This is because many traders are betting on the false signal and are forced to quickly return to the right side of the market. In this case, traders who misinterpreted the post-May action as a bearish head and shoulder formation could be attributed.

Higher prices seem likely in the short term, as the short-term KST, shown in Chart 3, has just come down. The graph indicates that during a strong bull run, signals 1-7 were followed by healthy gains. Signals 8-10 developed during the mini-bear market and were unsuccessful. The current one is likely to go well, as recently the price stood at a new closed marginal low and the KST at a much higher level than its lower level in June. This positive divergence has been marked with the two discontinuous green arrows.

Graph 3Graphs 4-6 of different cryptocurrencies show that the current rally has a broad base, as Monero, Litecoin and Etherium have gone up. Ether has a particular interest because it already exceeds 200 days of MA, unlike the rest, which are not.

Graph 4Graph 5Graph 6Chinese stocks are starting to break down

Cryptos may head north toward their 200-day MA, but Chinese stocks are moving in the opposite direction. This is because this week’s action caused Shanghai Composite to fall below the 200-day forecast.

Graph 7

This same move pushed him below the 2020-2021 uptrend line, which is effectively the neckline of a downward and sloping downward pattern. If this outage is maintained and the 65-week EMA (Chart 8) fails, this action is likely to trigger a long-term KST sell signal. Its short- and medium-term counterparties (Chart 8) are already in a marginally bearish mode, so it seems likely that downward pressure will be short-term.

Graph 8The Chinese ETF related to the most liquid market average is the iShares MSCI China Fund (MCHI), which is even weaker than the Shanghai Composite. Graph 9 shows that it has reached a maximum of 1 year and has fallen decisively below its 65-week EMA. Relative action has been even more questionable, with the breach of a five-year uptrend line and a distinct long-term KST sell signal.

Graph 9Good luck and good letter,

Martin J. Pring

This article is an updated version of an article previously posted on Monday, July 26 at 7:22 pm ET on the exclusive member blog Martin Pring Market Summary.

ThThe views expressed in this article are those of the author and do not necessarily reflect the position or opinion of Pring Turner Capital Group of Walnut Creek or its affiliates. Chartwatchers update

Martin Pring

About the author:
Martin Pring is one of the most prominent names in the industry. A master technical analyst and extraordinary educator, he is the award-winning author of numerous books on technical analysis, including Introduction to Technical Analysis and Explained Technical Analysis. The latter is now used by various international technical societies for training and for several decades was one of the three basic books for level 1 CMT certification with the Association of Market Technicians. Translated into more than seven languages, the book is, according to Forbes, “widely regarded as the standard work of this generation of chartists”. Learn more

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