Chartpunk Bitcoin Alpha #68
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 linear regression trend analysis of the 3-day chart of Bitcoin is showing to us that during the previous year $BTC has been oscillating in a rather wide, slightly ascending channel. Price is currently under the median line, and close to Fibonacci-based support which has served multiple times as support or resistance in the previous year. In case this trend seems valid to you, then the zone between $43k and $35k is where you want to build long positions.
The above high time frame Bitcoin chart is showing to us that price is currently on a strong support of $46000. In case of losing that, then a retest of the descending trendline is possible, and in case the line would not hold, then all eyes will be on the fact whether Bitcoin loses the crucial $40000 level or not. I call it crucial as losing this level would mean a lower low in the current high time frame uptrend, and put the last nail into the coffin of the current bull market.
Key AVWAP levels to watch are $50000 of the July 2021 uptrend, and $53600 of the November 2021 pullback. Trendwise price action above this zone is bullish, and bearish under the zone.
The analysis of the key daily moving averages (20, 50, 128, 200) is showing price action being in bearish territory. Bitcoin is trading under all of the key moving average levels, and around $48000 the 20MA is crossing down the 200MA, which is a bearish cross. First sign of some bullish momentum would be to get the $BTC price back above $48000. Change of the bearish trend can only be expected in case of confident price action above $53500. The Awesome Oscillator is in negative zone, and the RSI is trending down, both of which facts are showing bearish momentum.
LTF Market Structure
The AVWAP analysis of the low time frame Bitcoin chart is showing price action being under all of the key levels. The result of the analysis comes to the same conclusion as that of the HTF charts: bulls would require confident price action above $52000 to take control back from the bears. Anything under $47500 is bearish on this chart, the zone of $47500–$51800 is neutral, and only above $52000 can we start talking about a bullish revival.
Predator Chart Analysis
The 3-day Predator chart is bearish. Indicator has been consistently bearish since late November, and the price is below the descending 20-period moving average.
The 1-day Predator chart is bearish. Price is under a slightly descending 20-period moving average, and the indicator is bearish. Confident price action above $52000 could flip this chart into a bullish structure.
The low timeframe Predator chart is bearish. The 20-period moving average is descending, and the price action is staying under its level. Indicator is bearish.
In summary, all of the Predator timeframes are bearish.
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.