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AAX Trends

AAX Intelligence: BAT, NEO & BTC

AAX Intelligence: BAT, NEO & BTC

News & Insights

24 Oct 2020

BAT has recently seen two formations. The first is a descending wedge, with the second being a descending triangle formation.

BAT recent formations

BAT has recently seen two formations. The first is a descending wedge, with the second being a descending triangle formation. From the descending wedge BAT broke out positively. However this led to the formation of the descending triangle as BAT had not finished it's consolidation period.

BAT/USD

There was a period of major losses followed by the current consolidation. The losses were preceded by an extraordinary move from $0.24USD towards $0.42USD. This resulted in BAT seeing almost a 100% increase in price, over the course of half a month. Before this BAT had seen nothing spectacular in comparison to the rest of the market, trading within a parallel channel before a sideways period, and then the breakout.

BAT/USD

During the recent losses, BAT has fallen below the 0.618 Fibonacci retracement level. It then subsequently fell below the crucial 0.5 Fibonacci level, meaning that a possible sentiment change has occurred. With regards to the Fibonacci retracement, BAT has turned from bullish to bearish.

BAT/USD

Since the 2020 peak of BAT (which took place mid-August), BAT has fallen over 50%. BAT losing 0.73% a day, stretching over a 61 day period.

BAT/USD

Potential breakout

BAT is coming close towards a potential breakout. When evaluating the recent triangle, BAT has had its 5th EW in the triangle, meaning that a breakout is imminent. The direction of the breakout will affect whether BAT can regain its bullish status from earlier this year, or whether BAT would appear destined to return towards the lows of March.

Out of the two options, the cryptocurrency market alongside BAT appears to be leaning towards the bullish option, following the green arrow in a positive breakout.

BAT/USD triangle

When zooming out and looking at BATs bigger picture, the next major level of resistance is the 0.236 level. The 0.236 Fibonacci retracement level if hit, would require a substantial 46% increase in price from our current position.

BAT/USD Fibonacci

BAT Fibonacci

When looking back at the daily chart, the Fibonacci retracement levels from recent price movement tie up well with the long term viewpoint. A breakout above the descending triangle would see BAT return towards the 0.5 Fibonacci resistance level. This would likely be broken through. From here the proceeding level is the 0.618 Fibonacci retracement. The 0.618 on the daily is the same as the 0.236 on the BATs whole timeframe, showcasing the strength of this level. Overall if BAT did break above the triangle, then BAT would likely stop at $0.3 USD. From here a reevaluation of the charts would be required.

BAT/USD

BAT - Backed further by Fractals

Using the fractals for BAT analysis has been highly effective recently. BAT has obeyed the support and resistance provided by this tool very precisely, as demonstrated below.

BAT/USD fractals

The overall movement of the fractals, alongside BAT finding support from the lower second tier fractal line, supports the idea of a bullish breakout.

BAT indicators

Indicator Bullish Neutral Bearish Note
BBs X Squeezing, momentum appears to be with the bulls. Breakout will occur soon.
SAR X Indecisive, SAR currently moving up and down with little conviction due to BAT coming towards the end of its triangle.
EFI X
Ichimoku X Cloud currently red, candles below cloud. Bearish.
PnF X Currently red. Bearish.
RSI X RSI selling pressure
Is clear to see, displaying the sell off period. A move above 50 will likely see the bears lose control, with buying favoured over selling. However it is currently bearish as within the 30-45 range.
WWV X Currently red. Bearish.
Volume X The downward volume trend indicates that a breakout is likely soon.
Volatility X Has reached lowest levels since May and January. Both times were followed by a bullish run. However the runs are not due to the indicator, simply an indication that a run / substantial move of some sort will take place soon.
MA ADX X Still above BAT and red. Bearish.

BAT/USD indicators, BBs, Ichimoku, EFI, SAR

BAT/USD indicators, WWV, PnF, Volatility, RSI, Volume, MA ADX

Indicators conclusion

In conclusion the indicators are bearish. However as BTC headed towards the end of its symmetrical triangle the indicators were highly inaccurate. Therefore the overall conclusion of the indicators is that they are inaccurate due to the low volatility as BAT reaches the end of its descending triangle.

NEO

NEO has seen interesting price action since September, showing little correlation towards the rest of the cryptocurrency market, particularly at the end of September. Since the September peak when NEO reached nearly $26 USD, NEO has seen a 30% price decrease. This has occurred over a 32 day time period, as demonstrated below.

NEO/USD

NEO Fibonacci - strong support

NEO has retraced towards the 0.382 Fibonacci level, as shown below.

NEO/USD Fibonacci

The 0.382 support level is currently at $17.5USD. $17.5USD is the most important support / resistance level for NEO. If NEO can successfully hold itself above this level, this could be good news for those holding NEO. NEO has been unable to successfully hold itself above the current 0.382 level since 2018.

NEO/USD $17.5 USD

From the mini-run seen at the start of the year, NEO was unable to break the $17.5USD resistance level. NEO bounced off it and headed towards $4 USD. From August the $17.5 USD level has acted as support four times, showing the current strength of this level and the unlikelihood that NEO will fall below $17.5 USD

NEO/USD

NEO breakout, further looked into

The recent descending wedge breakout from NEO has clearly occurred. However, it has been followed by a period of sideways trading. The likelihood of this being a true breakout is high. This is due to the number of confirmation points being high (6), on the downwards resistance line from the descending wedge.

NEO/USD breakout

NEO is currently sideways trading, as shown below with the green box. If this box is broken above (which seems most likely) the next level that NEO will be aiming for is $20 USD.

NEO/USD - sideways trading

NEO indicators

Indicator Bullish Neutral Bearish Note
KCs X Change in momentum, however NEO has not broken above the centre line/tested the upper deviation.
MA ADX X Currently black, therefore neutral.
SAR X Underneath the candles, therefore bullish.
Fractals X NEO is successfully holding itself above the centre fractal, looking to make a move up. Bullish.
200 SMA X NEO is currently above the 200 day SMA. Bullish.
PPs X Currently below the centre PP. Bearish.
QQE MT4 X Lines very close together, bullish crossover appears imminent.
MACD X Positive crossover in a negative area, green histogram. Bullish.
Gann HL X Currently undecided, however bullish underlay soon appears likely.
PnF X Red. Bearish.

NEO/USD Fractals, MA ADX, 200 SMA, SAR, KCs

NEO/USD PnF, Gann HL, MACD, QQE MT4, PPs

Indicators conclusion

In conclusion the indicators for NEO are bullish. According to the indicators this means that NEO is unlikely to fall below the $17.5 USD level. NEOs next stop is $24USD in a bullish scenario, while in a bearish scenario expect NEO to hit just over $14 USD.

BTC

BTC has had a great week, with BTC gaining $1000USD in 24hrs! Since the bullish breakout of the symmetrical triangle occured, BTC has increased over 14% in value.

BTC/USD gains

Below is a reminder of the symmetrical triangle which BTC broke. The breakout occured at the end of the 5th Elliot triangle wave. This breakout is highlighted with the red circle.

BTC/USD breakout

From here BTC saw sideways trading within the $11200 USD - $11550 USD region. Once the $11550 USD level was broken BTC saw substantial gains, with a trend line angle at 70 degrees, the increase in price was dramatic.

BTC/USD sideways trading then takeoff

BTC/USD long-term Fibonacci

The price action of this week may be a historic moment for BTC. Like NEO, BTC has had a level that it has been unable to conquer since 2018. For BTC this level is $12000 USD. On the chart below this is the 0.382 Fibonacci retracement level.

BTC/USD Fibonacci

Ever since 2018 BTC has been unable to break above this level. BTC tried in March 2018, July/August 2019 and then August 2020. Each time BTC failed. However if BTC can remain above $12000USD this time and switch it into support, then we may well never see BTC fall below $10000 USD again.

BTC/USD - never back to $10,000 USD?

BTC EWs

BTC made its clear corrective wave during September which then went into a triangle. This consisted of an ABCDE move. BTC had underlying support which was stronger at the bottom than the top of the symmetrical triangle, forcing BTC to break above the downwards resistance of the symmetrical triangle. The move which we are currently within is impulsive. However the likelihood of BTC pushing above $13000 USD and remaining there seems slim. The likely move according to the EWs would see BTC retrace back towards $12300 USD before a push towards $13500 USD, with BTC closing above $13000 USD by the end of November.

BTC/EWs

BTC 1hr chart

When looking at the 1hr chart, it is clear that BTC will not close above $13500 USD. This is due to the Ups and the angle of the upwards move. A move above the R5 pivot point is relatively unheard of. It would be unsurprising to see BTC retrace back to $12600 USD, some minor consolidation before a slight retracement towards $12350 USD.

BTC/USD

BTC indicators

PnF - The PnF is currently bullish. There was a flip from red to green. However the simple buy signal from trading experience, usually signals that BTC will not move much higher.

EFI - The EFI is currently bearish. What goes up must come down. BTC will hit the centre point again, likely seeing BTC retrace back to $12350 USD.

MACD - The MACD is currently bullish. The histogram is green with a bullish crossover.

QQE MT4 - Similarly to the MACD, there has been a bullish crossover. The yellow like has risen above the red line.

RSI - The RSI is currently above 75. This is bearish. The RSI is bearish due to 75 being the overbought zone. A retracement of the RSI towards 60 seems likely, therefore bringing the BTC price down with it.

WWV - The WWV is currently green, therefore bullish.

BBs - BTC is currently riding the wave with the BBs. Therefore BTC is bullish. However BTC could see a retracement to touch the 20 SMA which could see BTC return to around $11500 USD, although this seems unlikely.

Ichimoku - Cloud has turned from red to green, with BTC above the cloud. Bullish.

SAR - The SAR is currently below the BTC price candle. There is also a substantial gap between the SAR and BTC. Therefore the SAR is bullish.

MA ADX - Currently green, therefore bullish.

BTC Indicators, PnF, EFI, MACD, QQE MT4, RSI, WWV

BTC/USD indicators, BBs, Ichimoku, MA ADX, SAR, Ichimoku

Indicators conclusion

In conclusion, the indicators are bullish. However, some are showing signs that BTC will retrace.

BTC conclusion - In conclusion, BTC is currently bullish, with the likelihood of a small retracement down towards $12400 / $12350 USD. The cryptocurrency market has become very much exciting again, further gains appear on the horizon!

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