Bitcoin Chartpunk Daily Alpha #29

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.

Market Structure

Bitcoin Market Structure 2021.10.25.

Bitcoin is continuing to consolidate in the channel of the previous days. The uptrend which started at the end of September can be considered as broken now, and might later turn into resistance on the way up. The stochastic RSI is crossing upwards in oversold territory which may signal momentum for the start of an upwards move.

3-Day Bitcoin Chart

Bitcoin 3-day 2021.10.25.

The 3-day Bitcoin chart is still bullish. The Predator indicator gave us a new green close, the 20-period moving average is ascending, and the price is above the moving average value. Our long term bullish price action seems to have remained intact during the previous days of consolidation.

1-Day Bitcoin Chart

Bitcoin 1-day 2021.10.25.

The 1-day chart has given us the first red Predator close since September 29. This is definitely a bearish sign. The 20-period moving average is still ascending, and the price is above its level. A close under the 20MA line with a red Predator indicator is usually a bearish signal. Let’s see if the price can stay above the 20MA level of 59.1k. This chart is calling for caution.

8-Hour Bitcoin Chart

Bitcoin 8-hour 2021.10.25.

Our short term Bitcoin chart is bearish. We have been receiving continuous red bars from Predator for 4 days now, the 20-period moving average has started to descend, and the price is sitting just under the MA value. This chart would require Bitcoin to start printing closes above 63k to become bullish again. The only positive signal on this timeframe is the stochastic RSI which has floored in oversold territory, and which could signal an upwards change in momentum.

Summary

This is the time where investors need patience, and very strong attention to market tendencies. It is not a question, that the macro Bitcoin environment is outright bullish. The recent breach of the all time high, the commencement of US ETF trading and general market sentiment is definitely calling for new highs in the range of 100k. Some analysts even estimate local tops of 150–200k during this bull cycle. Seasoned hodlers naturally sit on their stacks and buy all dips like this. Active traders need however to follow proper risk management guidelines. To me the general market structure is bullish, and this is confirmed by the 3-day Predator chart. The fact however that the 1-day and 8-hour charts are becoming cleanly bearish is calling for caution. I usually partly de-risk my portfolio in these times, and closely follow the market. The current consolidation channel between approximately 60.5k and 61.5k could be decisive. If price breaks out to the north, then 65–66k could be the next resistance, the tackling of which might signal the next leg up. To the south 57.5k and 53k are my support levels. Any significant breach of 53k to the south would be an exit signal from long positions.

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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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Disclaimer

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.

Trading and hodling bitcoin since 2015 I Focusing on longterm trends I No alpha for daytrades