Chartpunk Bitcoin Alpha #71
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.
High Time Frame Market Structure
If we analyze the macro time frame Bitcoin market with anchored volume weighted average price levels, then we can identify the significant support and resistance levels. The average price of the 2020 March bull market is currently at $29300, this is what I am considering a very important macro level support of the current bull market. This level is in confluence with the low of 2021 July which enforces its role as support. The average price of the 2021 November pullback is currently at $51100 — this is the level which Bitcoin bulls need to break and flip into support.
The analysis of the key daily moving averages of the Bitcoin market is currently showing a bearish market trend. The daily 20MA and 50MA are steeply declining, and have already crossed down the daily 200MA. The daily 128MA has also started to decline, which fact makes it a strong resistance. The Awesome Oscillator is in clearly bearish territory, and the 3-day RSI is trending down towards the oversold territory. Based on this chart, price action under $43500 is bearish and the bulls need to present confident price action above $52500 in order to reclaim control of the market.
Multi Time Frame Momentum Analysis
If we analyze the Bitcoin market with the Directional Movement Index (DMI) indicator then we come to the conclusion that $BTC is currently in a complete bearish momentum. The DMI is clearly bearish on all of the 4h/8h/1d/3d time frames. In momentum analysis I am using the Parabolic SAR to filter the noise, and in the current case the PSAR is also bearish on the 4h/8h/3d time frames. A dip under $40000 would flip the PSAR bearish on the 1d time frame as well. No bullish momentum can be seen on the Bitcoin market currently
Low Time Frame AVWAP Analysis
The average price of the downwards price impulse of 2021 November on the low time frame 8-hour chart is currently at $50600 which can be considered as the resistance which the bulls need to flip in order to get back the market into bullish mode. $47350 and $44400 are also resistances. The Stochastic RSI is oversold on the chart which may assist the bulls in trying to cut through the resistance zone.
Multi Time Frame Predator Chart Analysis
Analysis of the 4h/8h/1d/3d time frames with the Predator indicator is also painting a bearish picture. The 20MA is descending on all timeframes, and price action is under the 20MA level on all time frames. Indicator is also bearish, only the 1d Predator is green, but this signal shall be filtered by the bearish indication of the other time frames.
The bears are in clear control of the current Bitcoin market, and there is no sign of bullish revival on any of the time frames that I have analyzed. If the bulls want to reclaim control of the market, they need to present a clear and confident price action above the $51000–53000 levels.
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.