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 high time frame 3-day market structure chart the price of Bitcoin has been moving between the AVWAP level of the July uptrend and the previously broken downwards trendline of the April pullback. I am considering the price action of the last two weeks as a retest of the trendline, and the trendline has been holding so far.
Stochastic RSI on the 3-day chart is oversold, and has been oversold now for a rather long period, which is a great base to build bullish momentum on.
If the trendline breaks to the downside then the midline of the parallel channel around 41000 could serve as support. The AVWAP level of September 2020 is currently at 38300, providing further support to the south.
To the north the bulls have immediate resistance at the 50300 AVWAP level of the July 2021 uptrend, and then there is a rather strong resistance zone between 55000 and 55400. Confident price action above 55400 could signal the end of the downtrend that has started in November.
The analysis of the HTF moving averages is not paiting a very bullish picture right now. The 20MA has already crossed down both the 50MA and the 128MA, and is likely to cross down the 200MA in the close future. This is definitely bearish in the short term. The 50MA is also in the decline, and the 128MA is flattening out. Price action currently is just above the 200MA, the loss of which level is traditionally a strong bearish signal in technical analysis. The bulls would need confident price action above 57000 to arrange the MA lines back into a bullish pattern.
The analysis of the 3-day Bitcoin RSI indicator is painting a bearish picture. The downtrend of November has pushed the indicator level under the ascending trendline that has started in June. This is definitely a high time frame warning signal for the bulls, and it should be acknowledged that the bulls have just lost yet another important support.
LTF Market Structure
The low time frame Bitcoin chart is bearish. The AVWAP analysis is showing to us that the zones of 48400–49500 and 53400–54400 are currently strong supports of the bears. The price is currently within the lower zone, the loss of which may result in further moves to the south. The stochastic RSI is overbought on the 4-hour chart, which is favoring the bears.
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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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Join the discussion!
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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.
