Bitcoin Bellwether

Posted by on Sep 27, 2018 in Be a Trader | 0 comments

Triangles imply thrust, high rate of change moves. From a trading opportunity point of view, Bitcoin sets up for a straight-line trend after it breaks out of the wedge formation seen here.

For swing traders, the use of a band breakout, or a moving average crossover should get you into the trade. Use the largest width of the triangle measured from the last pivot inside the formation for a target.

 

This chart is the NYSE Bitcoin index, but the coin itself and the futures have the same pattern calling for a $4,500 to a $5,000 swing.

For long-term equity investors, given that Bitcoin is a leading example of speculative exuberance and was a foreshadowing of the Dow peak in January, I suspect it will be a leading index of the Dow this fall.

If I reverse engineers this from the bearish outlook for US Stocks, expect the 4,500 dollars move to be a spill for this market going into the end of the year.

Furthermore, given the patterns are repeating here, if we use the Chinese markets as a similar pattern the expectation would be for a crash in Bitcoin prices.

A move to new lows, a move below $5,883 on the NYSE bitcoin index, should lead to lower prices; and this could lead the US equity markets into their bear markets.

The informed trader is our best client, a Thinking Man’s Trader begins here. 

 

Great and Many Thanks,

 

Jack F. Cahn, CMT

A Thinking Man’s Trader Since 1989,

Copyright 1989-2018

http://www.thinkingmanstrader.com

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