Re: Arepo's Weekly Newsletter Discussion and Analysis -- closing remarks
the violent snapback we witnessed in the past 24 hours appeared to me as a chain-reaction of closing shorts. while its impressive volume and long wicked candle formation looks like it marks the short-term bottom, the mid-term downtrend still looms.
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short-term moving resistance
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we are just now breaking above a robust short-term moving resistance i discovered with 5 points of contact and 1 major violation. this is definitely a bull signal and we could see a recovery up to the mid-term trendline in Figure 1, issue 7 April (most likely). however, low weekend volume may impede this and we could see consolidation in the $450-$380 range (more likely). a break below the $380 long-term support would suggest a double bottom, (less likely), or an abrupt continuation of the downtrend (least likely).
this particular formation (v-bottom) is relatively unique and has occurred far fewer times than the more robust patterns i have a better statistical understanding of. honestly, some of the ridiculous volatility we saw in the last couple of days took me by surprise, but then again, this is only the second real bear market that bitcoin has ever seen. i think many market participants are having trouble trading this environment, as this kind of snapback occurs in relatively inefficient markets. the ticker price suddenly moves below an important support, but the bid depth is too thin to prevent significant slippage, even though the buying pressure below this price point is significant enough such that if the buyers and sellers were more coordinated, the price volatility would be far less.
anyway, i hope you all caught the bearish divergence earlier in the week and were at least prepared for the large dip. with great volatility comes great profitability, so i hope you were on the right side of those powerful waves. i took only a slight loss, but did not make any gains as the constellation of patterns i was following in the indicators revealed themselves as lagging, instead of leading patterns. more on this in the next report.
--arepo
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short-term moving resistance
---
we are just now breaking above a robust short-term moving resistance i discovered with 5 points of contact and 1 major violation. this is definitely a bull signal and we could see a recovery up to the mid-term trendline in Figure 1, issue 7 April (most likely). however, low weekend volume may impede this and we could see consolidation in the $450-$380 range (more likely). a break below the $380 long-term support would suggest a double bottom, (less likely), or an abrupt continuation of the downtrend (least likely).
this particular formation (v-bottom) is relatively unique and has occurred far fewer times than the more robust patterns i have a better statistical understanding of. honestly, some of the ridiculous volatility we saw in the last couple of days took me by surprise, but then again, this is only the second real bear market that bitcoin has ever seen. i think many market participants are having trouble trading this environment, as this kind of snapback occurs in relatively inefficient markets. the ticker price suddenly moves below an important support, but the bid depth is too thin to prevent significant slippage, even though the buying pressure below this price point is significant enough such that if the buyers and sellers were more coordinated, the price volatility would be far less.
anyway, i hope you all caught the bearish divergence earlier in the week and were at least prepared for the large dip. with great volatility comes great profitability, so i hope you were on the right side of those powerful waves. i took only a slight loss, but did not make any gains as the constellation of patterns i was following in the indicators revealed themselves as lagging, instead of leading patterns. more on this in the next report.
--arepo