BTC Double Bottom, Bullish Divergence Playing Out on the 1 hr
Updated
Disclaimer: Things move fast and indicators may be showing something entirely different by the time this is posted, please base your trades on your own research and experience.
This post is building upon my earlier idea now that we have more information. At the time of this writing BTC is currently breaking through the ascending support of the large triangle formation we have been in, and this recent drop out of it may indeed have been a fake out.
The bullish divergence on the 1 hr chart that I saw is now starting to play out. We were also in oversold territory on the 1 hr RSI and also bounced off the 30 RSI on the 4 hr. We have a double bottom forming at key support. I've shown where we last touched the 30 RSI on the 1 hr chart to show that a very successful trade could have been made if bought then and sold at the first sign of bearish divergence near the 70 RSI. I expect a similar move to happen now.
I have already opened a long position at the first sign of bullish divergence on the 1 hr RSI @ 31,235. I will add to my position if the 4 hr candle closes bullish, which seems inevitable at this point and will signal a clear bullish reversal off of key support. If you want to scale into this trade some levels you may consider are, adding a little at market price as all signs point up from here, and add more if the 1 hr RSI falls to retest the breakout from underneath the 30 level, or at a price retest of the green ascending support line we have just broke back above. Currently the 5 minute is overbought and I think we will see a slightly better entry for this move up than we have at the moment.
I will be scaling out of this trade starting at the 33.3k level and then throughout the purple zone shown.
From there we may retest the upper green ascending support line I've shown and reject it, with a possible short position entry, but I never like to predict more than one major move at a time. It would just make sense as in the long term we are hanging way up in the air and inside of an ascending triangle formation.
Good luck everybody and happy trading! 💪🤑
This post is building upon my earlier idea now that we have more information. At the time of this writing BTC is currently breaking through the ascending support of the large triangle formation we have been in, and this recent drop out of it may indeed have been a fake out.
The bullish divergence on the 1 hr chart that I saw is now starting to play out. We were also in oversold territory on the 1 hr RSI and also bounced off the 30 RSI on the 4 hr. We have a double bottom forming at key support. I've shown where we last touched the 30 RSI on the 1 hr chart to show that a very successful trade could have been made if bought then and sold at the first sign of bearish divergence near the 70 RSI. I expect a similar move to happen now.
I have already opened a long position at the first sign of bullish divergence on the 1 hr RSI @ 31,235. I will add to my position if the 4 hr candle closes bullish, which seems inevitable at this point and will signal a clear bullish reversal off of key support. If you want to scale into this trade some levels you may consider are, adding a little at market price as all signs point up from here, and add more if the 1 hr RSI falls to retest the breakout from underneath the 30 level, or at a price retest of the green ascending support line we have just broke back above. Currently the 5 minute is overbought and I think we will see a slightly better entry for this move up than we have at the moment.
I will be scaling out of this trade starting at the 33.3k level and then throughout the purple zone shown.
From there we may retest the upper green ascending support line I've shown and reject it, with a possible short position entry, but I never like to predict more than one major move at a time. It would just make sense as in the long term we are hanging way up in the air and inside of an ascending triangle formation.
Good luck everybody and happy trading! 💪🤑
Trade active
I added to my position @ 32,450 after the 4hr candle closed bullish, signaling a trend reversal.As expected the price is falling from there and I suspect it will test the green support line at around 32,100 which is where I will be adding to my initial trade for the second time.
Trade active
The 30 minute candle just tested the green ascending support and closed above it.I added to my long position @ 32,200
Next I am waiting for the 1 hr candle to close above the support to add yet another time to this long position.
Trade closed manually
The hourly candle closed underneath the green support zone causing some uncertainty and bearish divergence in the smaller time frame RSI charts.I closed my trade @ 31,850 for a very small profit and will look for a possible re-entry at a better price.
We bounced off the lower yellow horizontal support twice now and may be on our way to test it again. The more a support is tested the more likely it is to break. We are also underneath a large triangle after a giant run up in the last months and caution must be used in such an area as this.
For now I'm back on the sidelines waiting for a clear signal of where we may be headed next.
Good luck and trade with care!
Note
Wow, what a drop. I hope everybody got out of thier longs in time. We are currently testing the 30 RSI on the hourly chart like I thought may happen. If it closes above I may begin to re-enter a long position. Bullish divergence is now completely obvious on both the 1 hr and 4 hr chart.Shorting this on the way down would have been nice, but I was busy during any clear signal to short it. Now I wait for a good long entry as it cannot fall forever. Longing the bounce back from this current fall will be a great way to recover lost profits on value lost in your Bitcoin portfolio. This is probably my last update here and I will create a new idea when I decide it's time for a long entry.
Closing the daily candle above 30k is going to be key for not falling even lower to the ~27k level.
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