Chartpunk Bitcoin Alpha #59
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.
HTF Market Structure
On the 1-day chart the price of Bitcoin is still in consolidation near the bottom trend line of the bull market that started on July 20.
The uptrend of July 20 is intact with higher highs and higher lows, and with an ascending trendline support currently at 53800. The current anchored volume weighted average price (AVWAP) level of this uptrend is 50400, serving as ultimate support for the bulls.
The 58800 AVWAP level of the shorter uptrend that started on September 29 is currently acting as resistance. The price has bounced several times during the previous week from this level, today we are seeing the latest of these bounces.
The current AVWAP level of the November 10 pullback is 60300, this is also resistance to be tackled by the bulls if they want the price to continue its journey upwards.
The stochastic RSI is trending near the oversold territory on the 1-day chart and has reached oversold levels also on the 3-day chart, so the high time frame momentum is there for a bull revival. Historically an oversold stochastic RSI on the 3-day chart means a great opportunity for dollar cost averaging long term investors to buy into the market.
LTF Market Structure
The low timeframe Bitcoin chart is bearish. The pullback of November 10 has a current trendline level of 60300, and the AVWAP of the same pullback is currently 60000. The AVWAP level calculated from the November 15 trendline bounce is currently 58600. These are all support levels for the bears, as long as the price is trending under these, the bears will remain in control of the LTF price action.
The stochastic RSI on the 4-hour chart has became overbought upon the reach of the bearish support zone. Accordingly, the bulls did not have enough strength to tackle the bear support, and the price bounced back to the current 57000 level. If we take a look at the LTF chart, we can see that this has happened many times during the previous week, showing that the bulls are just not strong enough to break through the bear support zone.
Based on the above HTF and LTF market structure analysis, I am considering the level of 59000–60500 as a strong resistance of bullish price action continuation. Support zone of the bulls is currently in the 50500–53500 level. If the support level fails to hold, then the uptrend of July 20 will be in danger.
Let’s zoom out for a sec!
The ascending logarithmic channel of Bitcoin is showing us that the uptrend since late 2015 is intact, and the price is currently attempting to tackle the middle level resistance , currently being around 70000. I am still on the opinion that in case the bullish momentum seen on the HTF charts is able to push the price action of Bitcoin above the middle level, and with a retest could establish this line as support, then we could see 6-figure levels in the coming months. All eyes are now on keeping the July 20 uptrend intact.
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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 long time frame market structure is indicating a solid trend, and intact price action is supported properly by the low time frame charts.
What are my key indicators?
I am using trendlines, channels and moving averages to identify market structure and to spot trends. In crypto trading my core moving average indicators are the 50 and 128 daily moving averages. I am also using anchored volume weighted average price (AVWAP) analysis to identify support/resistance levels.
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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.