Into the Bitcoin Charts
Featuring "Big Chonis"
Published on: June 24th, 2019 • Duration: 15 minutes“Big Chonis” joins Real Vision to outline potential bullish and bearish scenarios for bitcoin in the months to come. He utilizes Fibonacci retracements and historical analogs to determine key levels, and discusses specifically how to trade the current setup, in this interview with Jake Merl. Filmed on June 19, 2019.
JAKE MERL: Welcome to Trade Ideas. I'm Jake Merl, sitting down with Big Chonis of Chonis Trading. Great to have you on the show for your very first Real Vision interview.
BIG CHONIS: Jake, thank you so much for having me, really appreciate it.
JAKE MERL: Since it's crypto week here at Real Vision, we'd love to get your view on bitcoin, and the different scenarios you see unfolding over the weeks and months to come. But before we do so, can you please review your background, who you are, and what you do at Chonis Trading?
BIG CHONIS: Absolutely. I've been interested in stocks and trading for about a decade now. The past three years though, I've been really focused on crypto. And that's really the focus of my trading as well. I'm also a feature contributor to "Bitcoin Live," which is a wonderful subscription-based educational platform where I put out content weekly with other really great like-minded traders. And I also do personalized mentoring online with students, to give them a sense of basic TA disciplines. And of course, I'm also very active on Twitter and YouTube.
JAKE MERL: So you mentioned your methodology is mostly based on technical analysis. So which indicators and tools are you looking at right now?
BIG CHONIS: The past few months at bitcoin has been just tremendous price action. Really ever since we broke out of our ascending triangle, around $4,000, Bitcoin is just going up end up with higher lows and higher highs. When we're in a market like this, a very aggressive bull stance right now, I prefer using higher time frame charts, higher time frame indicators.
Whether it be three-day up to a weekly chart, to give me more of a bias of what the options of price action can be, what the more meaningful support areas are. And then what are reasonable, achievable bull targets. In this particular price action I'm very interested in more of a longer term, higher time frame charts.
JAKE MERL: So what exactly are you looking at? Which specific charts are you most interested in right now?
BIG CHONIS: So with bitcoin here, we're at a very interesting level, we're over $9,000. We've been holding that for a couple of days here. And the big question is, can Bitcoin really approach the $10,000 area? This was an area which stopped a bullish move a year ago, when we got basically stopped just under K.
And ever since then, we've basically been in this lower lows market here. So the psychological barrier of $10,000, just the achievement in itself. And if we were able to get Bitcoin above 10K, we really have to start asking the question, is the bear market truly over? Is this that price level that we'll say we're basically out of the danger zone? That the low is in and we're only kind of moving up from here. My feeling on this is, we can definitely break through 10K.
My biggest thing I want to see accomplished, is to have a monthly close above $10,000. We could definitely close the week out or the day out with a break of 10K. But a really meaningful monthly candle close above $10,000 in my opinion, would kind of be that thing that says to me, OK, maybe we might break 10K again and go lower, but the $3,150 area we hit back in December of 2018, I would have a lot more confidence that that is the now new local bottom of Bitcoin, where we may range for quite a while here, as we head into the next part of the year here.
We have to also understand that Bitcoin is 3x basically since our $2,150 area here. So without a real meaningful pullback, and Bitcoin has a way of doing that. We've had four or five major pullbacks in Bitcoin's price action, 70% and 90%. We've had over a dozen 30% pullbacks along the way. So these can be buying opportunities. I personally would not FOMO into a break of 10K. But there will be opportunities if you feel you've missed the boat, to get into Bitcoin at a lower price and use that as an opportunity to do so.
JAKE MERL: So in terms of the technical analysis, can you take a deeper dive for us? I know you're looking at a few different indicators. So if you could walk through the charts you brought along, that'd be great.
BIG CHONIS: Absolutely. So I brought along a couple charts here. I'm a big fan of trying to look in the past and see how it can translate to the future. Call those fractals. So basically, I'm a big proponent of analyzing previous bear markets of Bitcoin's history and what can that tell us. So in 2014 or the end of 2013, Bitcoin hit $1,000. And then for a year, it basically went from $1,000 to about $150. That was your big pullback there.
Once it hit that bottom, it didn't just start on its bull run again. We had 10 more months of this consolidation period. $150 to $350 back to $200, until that real breakout kind of actually happened. So I brought a few scenarios here. I'll start with the bearish one here. So in 2013, we had this really strong pullback from $1,000 all the way up to down to $350 or so.
Then we had a really nice bounce. And that brought the price action about $600. Now that hit the 38.2% Fibonacci extension basically from top to the bottom. And couldn't get past that. And once that happened, the bear market continued and we actually ended up putting up lower lows. We fast forward to where we are right now in the Bitcoin price action. And Bitcoin is right at once again, the 38.2% Fibonacci resistance, if you start from our 2017 top to our current bottom, we have now around 31.5%.
So very similar there. So if this area of 38.2% resistance, around $9,400, is actually as solid of a resistance as what we've seen in the past, this could be our local top. And we could basically be drifting down lower and lower and potentially put in that bear scenario, where we may even retest the 3Ks once again.
I have a bullish scenario. Now the bullish scenario basically is, after the 2014-2015 bear market, we had this consolidation period when we did hit our bottom, it was about 10 months where we hovered and we actually put in just a higher low from $150 to about $170 or $180. Once we hit that $170, $180 area, we had this incredible upthrust of a Bitcoin bullish price action, bringing the price action all the way up to about $500 there.
And this was really the beginning of the next phase of the bull market. We could really say that was officially over. But, when it hit that point, it had this vicious 40% pullback. Now if we had a 40% pullback in our price action right here, that kind of takes us back down to that $5,700 to $5,500 area. Bitcoin back in 2015, 2016, found the support in our golden pocket. Our 61% to 65% retracement there. That golden pocket now does put us right in that $5,500, $5,700 area, an ideal area to find support, bounce hard, and then continue that bull market process.
I have another cool chart where I use my VPVR. Volume Price Visual Range. This basically gives us a representation of the price action within a specific window of price history. And what we see on this, is we have these things called windows, where we have areas of very limited price history. Where Bitcoin either crashes through very quickly or rises up very quickly. And those are defined here by these kind of open gaps in the price.
The larger areas of the price action we see here is right around the 4K area. This represented the dump that basically brought Bitcoin down from 4K to almost 3K. And then the big explosive bullish move we had when we busted out of 4K and we broke through our ascending triangle pattern. So we see that right now as a major area of support.
Between that area and $6,400, there's a gap. There's basically gap all through the 5Ks, where there's very limited price action and price history. This means that if the price action was to get back into that area, that's where you could fall through very quickly. So ideally, you'd want to see the price get back into that area, find that historical support, and then engage higher.
I'll point out one more thing about this chart that you also will notice there's a decent-sized window, let's call it under $2,400 to about $1,500. And that happened with Bitcoin when it rose on its parabolic move of 2016 and 2017 extremely fast from 1K to basically 3K in a matter of weeks or so. So I keep it in the back of my head that I like to see the gaps in the VPVR get filled.
And there's a big one down there. We have to acknowledge that most of the price action of Bitcoin, most of the accumulation of price action of Bitcoin happened sub $1,000. Where all the big money and the smart money really got into Bitcoin. So there are open areas where the price action can move very freely and quickly. And I would like to see those areas get filled to basically establish a stronger base of support.
And my last chart here is kind of a fun one, how I describe where we are in this overall market. So we have our summit Bitcoin 20K, OK? And we have our base camp Bitcoin $3,150. And we take a Fibonacci from the top to the bottom. Our first target, our first camp one is the three, sorry, the two, three, six Those run $7,000. We hit it. We did find initial resistance, and then we just blasted right through that. So in my head here, wow, 7K, the two, three six, that's got to be strong support. We've been above it for several weeks now. And now we're sandwiched between the 23.6% and the 38.2%.
If we can maintain support on the 23.6% and if we can break through the 38.2%, which is right around $9,400, I have to basically put in play the chance we can go to our next Fibonacci range or resistance right in our golden pocket area, and that's around $13,000 Bitcoin. So a close, especially a weekly close above the 38.2%, putting us above $9,400, does put that next Fib resistance in play.
But here's the other side of that. If the 38.2% continues to be very strong resistance, if we're unable to get above it at the end of this month, at the end of the next few weeks here, and it really shows it's strong resistance, the bears will begin to assert that, and they're going to put pressure on the market there. And they're going to try and drive the price down to challenge the 23.6% as support. How strong is this support really? We lose the 23.6% support around 7K, and then everything down, in my opinion, is open season, a potential of being hit.
JAKE MERL: So based on the technical analysis, you just laid out, how do you suggest traders play the current environment?
BIG CHONIS: So I have a short-term bias that I, I don't want to say that Bitcoin has topped off here, because a lot of people have been saying that, including myself, for past several weeks, and Bitcoin just laughs and blows right through your near term resistances. I would be very surprised though if we're able to blast through 10K in the next few weeks. Definitely possible, and we've seen it happen before.
But you have to realize that with that occurrence, our people that loaded Bitcoin on the 5K, 6K, 7K, are they now going to be taking profit? Because they then feel, wow, this was a great run, but it's got to pull back sometime. And historically, Bitcoin always does give you that 30% to 40%, maybe even more percent pullback opportunity that you can then re-engage the market.
I do have a longer term perspective though, and that's kind of the chart I have here, which is basically the road to $100,000 Bitcoin. And a lot of this has to do with the halving Which basically, when you mine Bitcoin, you get a reward. And that block reward basically is cut in half every four years. We're a little under a year away from our next halving. The past two halvings have basically been in the middle of the peak to trough of the previous market cycle. Which means next May should be somewhere near the middle of the bear market to the next bull market blow off top.
Which means, I feel the next year is a year of consolidation and accumulation, where I do not expect Bitcoin to go to all time high 20K in the next few months, or even in the next half a year or so, until we get into the 2020s and closer to the having. Entering every previous having, Bitcoin has been in an uptrend. It wasn't necessarily a massive bullish uptrend. But it was in an uptrend. And as we get closer and closer to the halving, the more confident I will feel that the low, that the bottom is truly in.
JAKE MERL: So super bullish in the long run and kind of cautious in the short run here. We'll see how it plays out. Thanks so much for joining us.
BIG CHONIS: Thank you for having me, really appreciate it.
JAKE MERL: So Big Chonis is bullish on Bitcoin. He thinks it will head much higher in the long run, however he's cautious in the short run and recommends staying away at current levels. He thinks there will be a better buying opportunity in the near future. On the flip side, a weekly closed above $9,400 and a monthly close above $10,000 could lead to a short-term move higher to $13,000. That was Big Chonis of Chonis Trading, and for Real Vision, I'm Jake Merl.