Chartpunk Bitcoin Alpha #67
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 is starting the 2020 year below $50000, which makes the ultimate bulls a bit disappointed, as a number of 6-figure EOY price calls have been made during the autumn 2021 run. It is very hard to pinpoint tops and lows, and no predictions or estimations should be taken for granted. In my newsletters I am trying to describe the trend and momentum behind the market, as those are hard facts. Everything else is mere speculation.
The current HTF momentum chart of Bitcoin does not provide any reason to me for opening long positions. Price action is currently below all of my key daily moving averages, namely 20MA, 50MA, 128MA and 200MA. The current price action under the $48000–48200 zone is bearish. The RSI is trending downwards, and the Awesome Oscillator is in negative territory, which are bearish momentum signs. The 50MA and the 128MA have performed a death cross at the level of $52700–53200, which is an other key resistance of the bulls.
The momentum analysis is bearish. The bulls need to first move the price action back into the $48000–53000 range, and possibly to break out from there later. In lack of such, I see no reason in opening long positions.
Taking a look on the key high time frame AVWAP uptrend levels we can see that Bitcoin has lost the July 2021 uptrend level of currently $50150, and also retested it from the south, so it is acting as resistance for now. Price action under this line is bearish. The AVWAP support of the March 2020 is currently at $30000, and is rising, which fact indicates an intact macro time frame bull market.
LTF Market Structure
The low time frame Bitcoin chart is bearish. Price action is below the $52000 AVWAP level of the November 2020 downtrend, and also under the $47800 AVWAP level of the latest downwards impulse. The only good sign here is that the downwards trendline from November 2020 has held as support.
Based on the analysis of the key AVWAP levels of the current downtrend we can see that Bitcoin is in clear bearish territory. This, and the almost overbought Stochastic RSI does not give me any indication for a material upwards move in the short term.
Predator Chart Analysis
The high timeframe Predator chart is bearish. Indicator is bearish, and the price action is way below the descending 20-period moving average.
The 1-day Predator chart is back into bearish territory. Price action is again under the 20-period moving average, which has also started to descend. Indicator is bearish.
The low timeframe Predator chart is bearish. The indicator is showing some improvement, and is cautiously bullish, but the price action is under the descending 20-period moving average.
Summarizing the Predator charts I see absolutely no reason in opening long positions. All of the main timeframes are bearish, so trend traders are advised to stay on the sideline for now.
From a trend trading perspective I do not see any reason for opening long positions in Bitcoin for now. Price action is clearly bearish, and anything below the $48000–52000 zone is clearly not interesting for long term trend trader investors.
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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.