Bitcoin (BTC) Tactical: More Fuel from Livermore?

May 20, 2019 / by Bill Noble

Hot on the heels of our recent success in using the work of Jesse Livermore, we are going to stay with this construct.

As a review, Livermore was a famous trader from the early 1900s. He is featured in a classic trading book, “Reminiscences of Stock Operator.” He is considered one of the most famous traders ever.

Livermore has a construct where an upward sloping diagonal range precedes a parabolic up move. The construct is shown in Figure 1.

 class= Figure 1

In our latest work, we are applying the Livermore framework to a Bitcoin (BTC) intraday chart. Looking at the 89-minute chart (Figure 2), we show the recent difficult consolidation period has taken the form of the Livermore cone.

 class= Figure 2

We believe if Bitcoin (BTC) holds Fibonacci support at $7,800, then the upside target could be $10,500. Given that this is an intraday chart, we believe this move could unfold sooner rather than later.

One key level to watch to see if another Livermore breakout is at hand will be $8,400 on the CME Bitcoin (BTC) futures chart (Figure 2).

 class= Figure 3

So far, that chart looks good as the recent flash crash in Bitcoin (BTC) filled a gap and created a solid retest of an important Fib speed resistance line.  

Bottom Line: To use an American football analogy, we are going to run our “Livermore play” until it doesn’t work anymore. Said plainly, we are staying with the bull trend and feel longterm buyers can begin to reenter the market.

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