Bitcoin trade idea - 4H Ichimoku levels
Updated
When prices go up, look for shorts. Here we trade 4H Ichimoku levels.
Bitcoin price hit an important level on the 4H Ichimoku cloud ($17,209). On November 30th we wicked above the level, only to come back for a higher high on December 1st. However, on the daily and 1H chart, the increase in price lacks conviction. Price action looks rather corrective up until now.
This could potentially mean that we've just made a new swing high and are going to reverse for a new swing low.
What levels does Ichimoku give us for a potential long entry, when prices go down?
Below $16,659 we're trading below the base of the green Ichimoku cloud , which gives a higher probability for lower prices to be tested. In such a correction we might expect a reaction around the $16,360 mark. However, any price movements to the upside from that level are probably corrective, and lower lows are to be expected.
For support we look at the 4H Ichimoku levels formed end of 2020. These levels are all below the previous two lows, formed on November 9 and 21.
Breaking these lows will make a lot of traders extremely bearish . However, this is not a favorable position to short (on the break itself), as prices are trading on support. There's a higher probability of buyers stepping in on these levels, absorbing selling pressure. In that case a 'D' might be formed, rather than another impulsive move to the downside.
Without the impulse to the downside, short traders will soon find themselves in an uncomfortable position. Stops from short positions will give buying pressure, leading up to the 'E' wave to be formed.
Remember, set your alert and trade the reaction. Happy trading!
Trade active
Still no sign of strength on BTCUSD inverse perpetual...Candle indicated by the arrow closes below the level with possible bearish RSI divergence (higher low in price, lower low on the RSi(14)).
Consequent push upwards could be re-test of the orange zone. We took the trade (no leverage for this one). Stop is wide, so we enter with smaller volume as not to run into too big of a loss when this idea is invalidated. Invalidation would be stopped out, or a 4H close above $17.206).
Remember: this is just and idea, NOT financial advice. DON'T take this trade, as it might run into a loss. Only take trades that fit YOUR plan and/or risk tollerance.
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