Chartpunk Bitcoin Alpha #61
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
The high time frame Bitcoin chart is in a bullish trend with consecutive higher lows and higher highs. Price is currently near the bottom trendline of the ascending channel. The stochastic RSI is crossing up from oversold territory which is usually a sign of bullish momentum.
The price zone between 52500 and 50800 is consisted of trendline and AVWAP supports, and is serving as a support zone of the bulls.
The AVWAP level of the latest bounce from trendline is currently at 58500, and this level is currently serving as resistance. The bulls have been struggling to get the price above this line for 10 days now, with no success.
In case the bullish momentum results in a successful flip of the 58500 AVWAP level into support, then the all time high zone of 66000–67000 should be the next target.
LTF Market Structure
The low time frame Bitcoin chart is still controlled by the bears. Following an unsuccessful breakout attempt, the price has got back into the descending channel which as been valid since November 10.
The bears have AVWAP supports at 57700 and 58800, these are definitely strong bearish supports as they have held many times during the previous three weeks.
We can see some buying power at the 56000 level, from where the price has bounced consequently during the previous days, so we can consider this level as bullish support for now. Loss of this level could send the price down to the channel midline of 54000, and possible even down to the channel bottom trendline of 52000.
Based on the above HTF and LTF market structure analysis, I am considering the level of 58000–60000 as a strong resistance of bullish price action continuation. Bulls would need very confident price action above 60000 to restore full bullish momentum, but this will get harder with each week of lower level price action, as the downward moving price is providing lower and lower entries for swing investors, who will line up with even heavier sell pressure around the resistance zone. Support zone of the bulls is currently in the 50500–54300 level. If the support level fails to hold, then the uptrend of July 20 will be in danger, and a possible swing low under 41000 would put an end into the higher highs and higher lows sequence that has been intact since late July.
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.