Chartpunk Bitcoin Alpha #66
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
Bitcoin has bounced up from the descending trendline of April ATH level, which is some relief for the bulls. This was a very important level to hold, and Bitcoin has nicely completed the task. Price is currently sitting on the July AVWAP uptrend support of $50200. Should this level hold, then the next mission of the bulls will be to tackle the $54200–54500 AVWAP confluence zone resistance, which could invalidate the downtrend of November. The Stochastic RSI on the 3-day chart is finally crossing up from oversold territory, indicating the building of high time frame bullish momentum.
Good news for the bulls are the now confirmed downtrend breakouts on both the RSI and the Awesome Oscillator charts. This is witness to the bullish momentum in the works. Looking at the moving averages the bulls should be happy about Bitcoin nicely holding the MA200, and also being back above the MA20. Reason for concern however is the fact that the MA50 and the MA128 will most likely create a death cross within the next 3–4 days, and longing such an event has very poor odds for success. Confident price action above $55000 could bring the price of Bitcoin above all of the important daily moving average levels.
LTF Market Structure
The low time frame 4-hour chart is neutral. Bitcoin is oscillating between the AVWAP zones of $52000–52800 and $48500–49300. I am still on the opinion that there is no point in opening positions within this zone. A confirmed breakout above $53000 would be bullish, and a confirmed breakout under $48500 would be bearish. Anything in between is neutral to me.
Predator Chart Analysis
The HTF 3-day Predator chart of Bitcoin is bearish. Price action is under the descending 20-period moving average and the indicator is bearish. Confident price action above $55000 is needed here for the bulls.
The 1-day Predator chart of Bitcoin is bullish. The price action has climbed back confidently above the 20-period moving average, and the indicator is green. The only concern here is the fact of the MA level being flat, bulls would want to see it starting to ascend.
The low timeframe 8-hour Predator chart of Bitcoin is cautiously bullish. Price action is above the ascending 20-period moving average, but the indicator has given us slightly bearish candles. Bulls would want to avoid losing the low timeframe momentum that has been built out in the previous days, it will be decisive whether the price action could stay above the 20-period moving average.
Summarizing the Predator charts the low timeframes are showing bullish momentum, with some caution on the 8-hour chart. The high timeframe 3-day chart however is still outright bearish, which is usually a sign for me not to take long positions.
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 $53000–55000, I will most likely remain neutral. Price action under $47500–48500 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.