Bitcoin 1 day analysis 12/15/2020
Good morning again ladies and gentlemen and welcome back to my daily look into the exciting world of Bitcoin! Today I have the daily time frame pulled up and I can see we are coasting right along in the lower 19k region. The market is sending me mixed signals as far as sentiment is concerned. The longer we hang out at this level the more likely a drop will develop. At least that is what you gather from the sentiment I have been a witness to. I wrote an article that really articulates my thoughts on the market at this time. Ill drop a link to the free article in the comments! Most of you may have already seen me post it in Crypto Coin Trader on Facebook. Anyways lets take a look at the chart this morning.
I pulled up the daily because I have been largely neglecting it as far as sharing the charts. Not because I do not have faith in the daily. I think the daily is by far the most significant of all the time frames. When something develops on the daily the moves are always bigger than the 4hr or whatever. For instance: If we have a head and shoulders on the 4hr the dump is usually less violent than the head and shoulders forming on the daily time frame. In my opinion it is because more people watch the daily and trade from the daily. At least in my experience. Even traders that trade every 5 mins can still pull great info from the daily time frame. Ill never forget when I first got into the charts I was embarrassed to ask for help so I played around on TradingView til I figured it out. Well one of the last things I figured out was how to change time frames lol. I was watching the daily time frame for 3 or 4 days. Just a single candle going up and down slightly throughout the day makes it pretty boring to watch a chart let me tell you. Even harder if you are trying to trade that candle lol. After I learned to change time frames things started looking better.
The daily is just a zoomed out version of all the time frames below it. There are a few things that are different such as the placement of the cloud and the 50 and 200 MA's. These are all different depending on what time frame you are zeroed in on. This is important and why I always recommend cycling through the major time frames before entering a trade. I think these are the most important time frames (in this order) daily, 4hr, weekly, 1hr, 15 min. After those its up in the air. I wouldnt go with one that nobody uses. You can even create your own time frame but that wont help much IMO. I mean how many people are looking at 43 minute candles? Just because they give you that option you may not want to create your own time frames just for that reason alone. Trading is a self fulfilling prophecy. Meaning it works because traders act on things in unison. If traders see a head and shoulders they will act accordingly. That is why you see the moves you see from a pattern like a H&S (head and shoulders) The bigger the move the more traders agreed that it was indeed a H&S. If the move is small you can tell the entire community didnt agree with it being a H&S. When someone argues with me over if a H&S is legit or not I always let the market dictate the outcome. No use in arguing when these patterns dont always work out even if they are text book perfection.
So the daily shows us above the 200 MA (blue line) the daily ichimoku cloud (huge green mass below the candles) and the 50 MA (orange line) These are all indicators that are pretty easy to use for noobs. I mean the cloud has a lot to it but the basics are easy enough to remember. If you are above the cloud its considered bullish. Below is considered bearish. When you are inside the cloud it typically means consolidation. If you cycle back through the candles you can easily find examples of the cloud enveloping the candles as advertised) So when you are inside the cloud its a chore to escape. The 50 MA and the 200 MA are totally different than the cloud but the premise of the basic principles are the same. Being above them is considered bullish. Being below them is bearish. The reason I like to keep the 50 MA and the 200 MA on the chart is they are great at predicting where resistance and support will show up. The daily shows the closest of all these indicators is around 17k currently (daily 50 MA) I have been awaiting my trading set up to finally catch up to the candles. The longer we spend at these levels the closer the daily 50 MA and the daily 200 MA and the daily cloud will get to the candles. This could give traders the confidence we need to break 20k. Hell just 15 days ago the daily 50 MA was around 14k.
Now there is no guarantee that the support would stop the drop. Nothing is certain in trading yall. With that being said the closer these indicators I just mentioned get to the candles the more confidence I am getting. December is half way over and we are knocking on 20k's door. We may have to break in if the bears wont come to the door. I mentioned in my article yesterday that institutions are buying Bitcoin up like its bottled water in a hurricane or toilet paper in a pandemic! The supply of Bitcoin is now a trickle in comparison to 1 year ago. We now only produce half the Bitcoin every block. This slows the new supply of Bitcoin significantly. Supply lowers demand increases and with that price increases. Simple economics right? Well Nothing is that easy. If it were we would have broken 20k already. But the reason I bring up institutions buying is simple. Do you really think entities like Paypal or Grayscale etc would be buying 5 figure Bitcoin if they didnt have faith it would go up in value? I can tell you right now institutional buying has me more bullish than ever. Even if they buy OTC (that doesnt effect the charts you and I see) eventually supply and demand will win and prices will rise across the board if institutions want that sweet BTC bad enough.
Just look at it like this... Grayscale is a huge firm that handles investment portfolios. This is an excerpt from an article I found online "During the pandemic, Grayscale has been buying BTC at breakneck speeds. As of mid-October 2020, the Grayscale Bitcoin Trust held BTC worth $6 billion — and estimates suggest this financial institution owns 2.5% of Bitcoin's total supply. That's about 450,000 BTC. This investment firm also has separate trusts focusing on Ethereum, Litecoin, Bitcoin Cash and Ripple's XRP, among others."
Paypal also threw their hats in the ring... An excerpt from an article I found about Paypals intro into the Bitcoin game: "PayPal’s new service eliminates two hurdles regarding the use of cryptocurrencies for retail purchases: 1) Getting cryptocurrency into a form that’s usable for retail purchases, and 2) Merchant acceptance of cryptocurrency as a form of payment. " Which means Paypal can be much more than an on off ramp for custodial Bitcoin service. You will (in theory) be able to keep Bitcoin in a wallet and use it anywhere. Sort of the way the crypto debit cards work. I know some people will act like this isnt a big deal but it is a huge deal. It doesnt matter if HEB wont take Bitcoin. People are still using it even if it is being converted immediately. Its a step in the right direction. I still need to brush up on Paypal and the way all their services work. Im not the biggest fan of custodial Bitcoin investments but if it gets more people into the game bring it on. Some traders dont care about owning Bitcoin. They only care about profit.
I know this has been a pretty long analysis and if you read this far congratulations. You are a Bitcoin maniac just like me. I could type about Bitcoin all day but alas... I have to get to work. Plus my coffee is getting cold. Bitcoin at this level is hard to predict. I will say I am long currently with a good stop loss set. I rarely share my position but I just want to make it clear how my sentiment is at this point in time. I have nothing to hide from you guys and gals. I suggest if you want to be long with me set a stop loss! Risk management is essential. I hope you all have a great day. Make good choices my friends! WTFDIK??
TLDR: I just got that silver Bitcoin in. Its beautiful. I will be doing a give away in the group "Crypto Coin Traders" On facebook. Someone decided to sweeten the deal with 100 dollars worth of Bitcoin. So we will do a contest for Xmas. Guess the price of Bitcoin or something along those lines. Details will be posted in a few hours in CCT (Crypto Coin Traders) Cheers yall!
I pulled up the daily because I have been largely neglecting it as far as sharing the charts. Not because I do not have faith in the daily. I think the daily is by far the most significant of all the time frames. When something develops on the daily the moves are always bigger than the 4hr or whatever. For instance: If we have a head and shoulders on the 4hr the dump is usually less violent than the head and shoulders forming on the daily time frame. In my opinion it is because more people watch the daily and trade from the daily. At least in my experience. Even traders that trade every 5 mins can still pull great info from the daily time frame. Ill never forget when I first got into the charts I was embarrassed to ask for help so I played around on TradingView til I figured it out. Well one of the last things I figured out was how to change time frames lol. I was watching the daily time frame for 3 or 4 days. Just a single candle going up and down slightly throughout the day makes it pretty boring to watch a chart let me tell you. Even harder if you are trying to trade that candle lol. After I learned to change time frames things started looking better.
The daily is just a zoomed out version of all the time frames below it. There are a few things that are different such as the placement of the cloud and the 50 and 200 MA's. These are all different depending on what time frame you are zeroed in on. This is important and why I always recommend cycling through the major time frames before entering a trade. I think these are the most important time frames (in this order) daily, 4hr, weekly, 1hr, 15 min. After those its up in the air. I wouldnt go with one that nobody uses. You can even create your own time frame but that wont help much IMO. I mean how many people are looking at 43 minute candles? Just because they give you that option you may not want to create your own time frames just for that reason alone. Trading is a self fulfilling prophecy. Meaning it works because traders act on things in unison. If traders see a head and shoulders they will act accordingly. That is why you see the moves you see from a pattern like a H&S (head and shoulders) The bigger the move the more traders agreed that it was indeed a H&S. If the move is small you can tell the entire community didnt agree with it being a H&S. When someone argues with me over if a H&S is legit or not I always let the market dictate the outcome. No use in arguing when these patterns dont always work out even if they are text book perfection.
So the daily shows us above the 200 MA (blue line) the daily ichimoku cloud (huge green mass below the candles) and the 50 MA (orange line) These are all indicators that are pretty easy to use for noobs. I mean the cloud has a lot to it but the basics are easy enough to remember. If you are above the cloud its considered bullish. Below is considered bearish. When you are inside the cloud it typically means consolidation. If you cycle back through the candles you can easily find examples of the cloud enveloping the candles as advertised) So when you are inside the cloud its a chore to escape. The 50 MA and the 200 MA are totally different than the cloud but the premise of the basic principles are the same. Being above them is considered bullish. Being below them is bearish. The reason I like to keep the 50 MA and the 200 MA on the chart is they are great at predicting where resistance and support will show up. The daily shows the closest of all these indicators is around 17k currently (daily 50 MA) I have been awaiting my trading set up to finally catch up to the candles. The longer we spend at these levels the closer the daily 50 MA and the daily 200 MA and the daily cloud will get to the candles. This could give traders the confidence we need to break 20k. Hell just 15 days ago the daily 50 MA was around 14k.
Now there is no guarantee that the support would stop the drop. Nothing is certain in trading yall. With that being said the closer these indicators I just mentioned get to the candles the more confidence I am getting. December is half way over and we are knocking on 20k's door. We may have to break in if the bears wont come to the door. I mentioned in my article yesterday that institutions are buying Bitcoin up like its bottled water in a hurricane or toilet paper in a pandemic! The supply of Bitcoin is now a trickle in comparison to 1 year ago. We now only produce half the Bitcoin every block. This slows the new supply of Bitcoin significantly. Supply lowers demand increases and with that price increases. Simple economics right? Well Nothing is that easy. If it were we would have broken 20k already. But the reason I bring up institutions buying is simple. Do you really think entities like Paypal or Grayscale etc would be buying 5 figure Bitcoin if they didnt have faith it would go up in value? I can tell you right now institutional buying has me more bullish than ever. Even if they buy OTC (that doesnt effect the charts you and I see) eventually supply and demand will win and prices will rise across the board if institutions want that sweet BTC bad enough.
Just look at it like this... Grayscale is a huge firm that handles investment portfolios. This is an excerpt from an article I found online "During the pandemic, Grayscale has been buying BTC at breakneck speeds. As of mid-October 2020, the Grayscale Bitcoin Trust held BTC worth $6 billion — and estimates suggest this financial institution owns 2.5% of Bitcoin's total supply. That's about 450,000 BTC. This investment firm also has separate trusts focusing on Ethereum, Litecoin, Bitcoin Cash and Ripple's XRP, among others."
Paypal also threw their hats in the ring... An excerpt from an article I found about Paypals intro into the Bitcoin game: "PayPal’s new service eliminates two hurdles regarding the use of cryptocurrencies for retail purchases: 1) Getting cryptocurrency into a form that’s usable for retail purchases, and 2) Merchant acceptance of cryptocurrency as a form of payment. " Which means Paypal can be much more than an on off ramp for custodial Bitcoin service. You will (in theory) be able to keep Bitcoin in a wallet and use it anywhere. Sort of the way the crypto debit cards work. I know some people will act like this isnt a big deal but it is a huge deal. It doesnt matter if HEB wont take Bitcoin. People are still using it even if it is being converted immediately. Its a step in the right direction. I still need to brush up on Paypal and the way all their services work. Im not the biggest fan of custodial Bitcoin investments but if it gets more people into the game bring it on. Some traders dont care about owning Bitcoin. They only care about profit.
I know this has been a pretty long analysis and if you read this far congratulations. You are a Bitcoin maniac just like me. I could type about Bitcoin all day but alas... I have to get to work. Plus my coffee is getting cold. Bitcoin at this level is hard to predict. I will say I am long currently with a good stop loss set. I rarely share my position but I just want to make it clear how my sentiment is at this point in time. I have nothing to hide from you guys and gals. I suggest if you want to be long with me set a stop loss! Risk management is essential. I hope you all have a great day. Make good choices my friends! WTFDIK??
TLDR: I just got that silver Bitcoin in. Its beautiful. I will be doing a give away in the group "Crypto Coin Traders" On facebook. Someone decided to sweeten the deal with 100 dollars worth of Bitcoin. So we will do a contest for Xmas. Guess the price of Bitcoin or something along those lines. Details will be posted in a few hours in CCT (Crypto Coin Traders) Cheers yall!
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