Bitcoin Chartpunk Daily Alpha #28
Join me on the journey to a 250k+ Bitcoin price! We will definitely have some good and bad times on this bumpy road, but with good alpha we will be able to ride strong trends and avoid sharp losses. Being a trend trader, I am not promising to pinpoint exact highs and lows, but I hope my view will assist you in making your own decisions.
Not much change here since yesterday. The Bitcoin bull market is continuing to cool in the previous days which is absolutely fine after breaching the all time high days earlier. The stochastic RSI has reached oversold territory, bulls should look forward to an upwards cross of the signal lines within the oversold region. The short term upwards trend has clearly broken, and the intersection of the trendline and the previous ATH resistance at 64.8k is rather strong. The negative price action is bringing our previous consolidation zone between 53.5k and 57.5k back into play, as a very strong support zone on the south. The long term uptrend is intact.
3-Day Bitcoin Chart (Predator)
The 3-day Bitcoin chart is bullish. Predator is indicating bullish trend with green candle bars, and the price is above the ascending 20-period moving average line. The stochastic RSI is still overbought on this timeframe, but has started to cross downwards, indicating the cooling of the run.
1-Day Bitcoin Chart (Predator)
The 1-day chart has started to show the effects of the consolidation. Predator has started to flip red today, which is a clear bearish indication. The 20-period moving average is still ascending and the price has not dipped under it. Stochastic RSI has started to approach oversold territory, this is not yet a bearish chart to me, but is definitely calling for attention.
8-Hour Bitcoin Chart
My comments here are exactly the same as yesterday. The 8-hour chart has turned into bearish. The Predator indicator has been bearish for multiple periods now, the price has fallen below the 20-period moving average which is linear. Good news is that the stochastic RSI has become and stayed fully oversold on this timeframe for more than 6 bars now, and the price seems to be hovering around the 60.6k zone. This shows to me that the price seems to find support in this current consolidation zone.
I am still on the opinion that the long term price action of Bitcoin will remain bullish. Defensive players might take off some capital at this level and wait for a clear market direction. The fact that the stochastic RSI has become oversold could also serve a nice entry point for the sidelined and the dollar cost averaging investors. My bet is that the price will not fall way under the current consolidation zone, and the bull run will continue, first by a clear break and retest of the 65k level, then upwards. The full reset of the daily stochastic RSI in this zone is my core reason for this. In the case of a breakdown, I think that the previous consolidation zone between 53.5k and 57.5k will hold the price.
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What is trend trading?
Trend trading is a market strategy that is reasonably different from swing trading or day-trading. A market “trend” is a tendency of a financial market price to move in a particular direction over time. Swing traders and day-traders are usually trying to pinpoint low-term market tops and bottoms, and take aggressive positions expecting to profit from a swift change of market direction. Trend traders are looking for consolidated and strong directions on a given market, and are trying to ride the trend for as long as possible. These traders normally enter in the market after the trend “properly” establishes itself. My core strategy in trend trading is to look for a market setup where the 3-day chart is indicating a solid trend, and is supported properly by the 1-day and the 8-hour charts.
What is the indicator coloring my chart candles?
I am using the Predator indicator from Decentrader as my core trading tool, that is coloring my candles green-red-turquoise-orange, and is providing me basic information on the trend. I am also using the 20-period moving average and Fibonacci levels for the identification of supports and resistances.
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The present article is a free material, for entertainment and educational purposes. Nothing in this post shall be considered as financial advice, you shall never make any financial decisions or financial investments based on a singly source of information and without doing your own research.