Chartpunk Bitcoin Alpha #65
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
It is highly likely that Bitcoin will finish this year within the horizontal price channel in which it has been oscillating all through 2021. The market has not verified the expectations of a $100k Bitcoin price for this year, but that is not a catastrophe at all. Bitcoin has remained the core and truly decentralized asset of the crypto world, and has attracted a lot of capital during the previous year.
On the high time frame chart we are currently seeing a nicely looking bounce from the downwards trendline of April. This is hopeful, however the bulls should keep the price safely above the line for a reasonable amount of time now. Such trendlines get weaker and weaker with any new touches, and the price has touched this line many times during the last two weeks.
Price is currently approaching the $50200 AVWAP level of the July uptrend, and the oversold Stochastic RSI on the 3-day chart should assist in taking back this very important level from the bears, and flip it into resistance. Should this be successful, then the $54500 AVWAP confluence level could be the next resistance, which consist of the AVWAP levels of the September uptrend and the November pullback. Confident price action above this $54500 level could signal the continuation of the high time frame bull market.
On my 3-day momentum chart we can see that the RSI has started to move upwards which is a good sign for the bulls. The Awesome Oscillator is however still in negative territory, and the price action is below both the 50-day and the 128-day moving averages. Confident price action above $56000 could bring us back above these key moving averages, and possibly save the bulls from a bearish crossover of these key moving averages.
The moving average analysis is showing how Bitcoin has held the 200MA, and has been able to climb back above the 20MA as well. This is very important, as we do not have any further support under the 200MA, so holding this line could be a key momentum of avoiding bearish continuation. If the bulls can maintain their momentum, then the level of the 128MA at $53100 is their next resistance.
LTF Market Structure
On my low timeframe Bitcoin chart we can see that the price action has successfully arrived above the lower AVWAP resistance level of $47900–48900. It would be essential for the bulls to stay above this zone, and possibly flip it into support. In this case, the next AVWAP resistance zone is that of $52200–53100. The current price level is currently neutral to me, meaning that anything below $47900 is bearish and above $53100 is bullish. The market will decide accordingly.
Predator Chart Analysis
The HTF 3-day Predator chart is bearish. Price action is under the descending 20-period moving average, and indicator is red.
The 1-day Predator chart is bearish to neutral. Indicator is bullish, and the price action is currently above the 20-period moving average. But the MA line is descending, indicating a bearish general environment.
The LTF Bitcoin Predator chart is looking bullish. Indicator has given us 4 green candles, and the price action is above the 20-period moving average. The MA line is flat, and confident price action above $48000–49000 could turn it into ascending direction.
All in all the Predator charts are neutral to me. Opening longs in a bearish HTF Predator environment is against my trend trading rules, but positive signs on lower timeframe are indicating that this is also no time to open short trades.
The following days / weeks will decide whether the bullish momentum visible on the low timeframes can restore the Bitcoin bull market or not. Currently my bias is neutral. As long as I do not see confident price action above $53000–56000, I will most likely remain neutral. Price action under $46000–48000 would signal clear bearish continuation.
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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.