BTCW V.1 Chart - Heikin Ashi, MA 20, 50, 100 & 200, RSI & MACD
Overall Summary:
Overall I am bearish. Bitcoin is trading in the $3600 to $4200 range during the last week, 81.5% down from the ATHs, with a market cap of $63 billion. The chart indicates a continuation of the current downtrend. The price is closest to the 200 MA with a trend towards the 200 MA. The volume has decreased slightly over the last week, which is support the current price action. While the RSI and MACD is is also in confluence with the price action over the last week with both signalling bearish price action.
Detailed Summary:
This chart uses weekly Heikin Ashi Candlesticks with 4 MAs (20, 50, 100 & 200), RSI & MACD.
Heikin Ashi candlesticks are great for trend and swing trading. Heikin Ashi means ‘average’ in Japanese because these candlesticks ‘average out’ price action vs traditional candlesticks that are based on OHLC (Open High Low Close). By averaging out price action this candlestick style reduces ‘noise’ and generates a much smoother chart pattern. This is helpful for trend traders as it is easier to identify the key trend in the market and to ignore smaller price volatility. During the last week the price has ranged by $500, opening at $4000 and closing at $3600. The price has decreased over the period which is a continuation of the long term price trend. The price is closest to the 200 Moving Average and during this period it has trended towards the 200 Moving Average. The 50 Moving Average is currently acting as resistance while the 200 Moving Average is acting as support. The key Support and Resistance areas are $3686 and $4185. I forecast that price will decrease over the next week.
Volume is a key indicator that I use to understand past, current and possibly future price action. Unfortunately a majority of the exchange volume is fake ‘wash’ trading so it is important to rely on data from reliable exchanges like Binance and BitFinex. Volume that supports price recent action helps strengthen my belief in a specific trend. During this period volume has decreased in confluence with the recent price action. On a longer term time frame, the volume is in confluence with the long term trends. I forecast that volume will decrease and this will support a decrease of price over the next week.
The RSI is a popular momentum based oscillator that helps us identify what stage in the security’s oscillation cycle it is most likely at. So after identifying the key market trend we can then apply the RSI to forecast future moves in price action (in terms of velocity and magnitude). This indicator is useful determining entry and exit points, for trend traders like myself, it is used on longer time frames as it is much more reliable. Most of the significant price action occurs around the 30 and 70 areas and ideally what we are looking for is divergence between the price action and the RSI. During the period the RSI increased/decreased/consolidated to X and it is in confluence/divergence with the recent price action. It has demonstrated a bearish failure swing is when the RSI rises above 30 (considered overbought), RSI drops back below 30 then RSI rises slightly but remains below 30 (remains below oversold) and finally RSI drops lower than its previous low. I forecast that RSI will decrease over the next week and this indicates decrease of price over the next week.
The MACD is a popular trend following momentum indicator that can help identify a security’s momentum, trend direction and duration. is a popular trend momentum indicator that can show us a security's overall trend. The core assumption of this indicator is that a security’s price oscillates around an equilibrium. Therefore by looking at the relationship between different MA calculations, we can identify what specific stage a security maybe of it oscillation cycle. This is why we have two lines, the first is called the MACD (26 - 12 day MA) and the second is called a Signal line (9 day MA). We also have a Histogram (MACD-Signal Line), which is the 1st thing I look at. Finally there is the Zero line, which is basically when the 26 and the 12 day are equal. The MACD , that combines several indicators, is worth watching when one or more of the following happens: crossovers (MACD/Signal/Histogram and Zero line), convergences/divergences between price and rapid changes. During this period the MACD has decreased in confluence with the recent price action. The MACD line remained below the Signal line which was a bearish trend in convergence with the price action. The histogram is trending towards the Zero line which was a bullish trend in divergence with the price action. I forecast that MACD will decrease over the next week and this indicates decrease of price over the next week.
References:
Heikin Ashi concise summary - investopedia.com/trading/heikin-ashi-better-candlestick/
Moving Average concise summary - investopedia.com/terms/m/movingaverage.asp
Support and Resistance summary - investopedia.com/trading/support-and-resistance-basics/
Fake exchange volume summary - blockchaintransparency.org/
RSI concise summary - investopedia.com/terms/r/rsi.asp
MACD concise summary - investopedia.com/terms/m/macd.asp
Overall I am bearish. Bitcoin is trading in the $3600 to $4200 range during the last week, 81.5% down from the ATHs, with a market cap of $63 billion. The chart indicates a continuation of the current downtrend. The price is closest to the 200 MA with a trend towards the 200 MA. The volume has decreased slightly over the last week, which is support the current price action. While the RSI and MACD is is also in confluence with the price action over the last week with both signalling bearish price action.
Detailed Summary:
This chart uses weekly Heikin Ashi Candlesticks with 4 MAs (20, 50, 100 & 200), RSI & MACD.
Heikin Ashi candlesticks are great for trend and swing trading. Heikin Ashi means ‘average’ in Japanese because these candlesticks ‘average out’ price action vs traditional candlesticks that are based on OHLC (Open High Low Close). By averaging out price action this candlestick style reduces ‘noise’ and generates a much smoother chart pattern. This is helpful for trend traders as it is easier to identify the key trend in the market and to ignore smaller price volatility. During the last week the price has ranged by $500, opening at $4000 and closing at $3600. The price has decreased over the period which is a continuation of the long term price trend. The price is closest to the 200 Moving Average and during this period it has trended towards the 200 Moving Average. The 50 Moving Average is currently acting as resistance while the 200 Moving Average is acting as support. The key Support and Resistance areas are $3686 and $4185. I forecast that price will decrease over the next week.
Volume is a key indicator that I use to understand past, current and possibly future price action. Unfortunately a majority of the exchange volume is fake ‘wash’ trading so it is important to rely on data from reliable exchanges like Binance and BitFinex. Volume that supports price recent action helps strengthen my belief in a specific trend. During this period volume has decreased in confluence with the recent price action. On a longer term time frame, the volume is in confluence with the long term trends. I forecast that volume will decrease and this will support a decrease of price over the next week.
The RSI is a popular momentum based oscillator that helps us identify what stage in the security’s oscillation cycle it is most likely at. So after identifying the key market trend we can then apply the RSI to forecast future moves in price action (in terms of velocity and magnitude). This indicator is useful determining entry and exit points, for trend traders like myself, it is used on longer time frames as it is much more reliable. Most of the significant price action occurs around the 30 and 70 areas and ideally what we are looking for is divergence between the price action and the RSI. During the period the RSI increased/decreased/consolidated to X and it is in confluence/divergence with the recent price action. It has demonstrated a bearish failure swing is when the RSI rises above 30 (considered overbought), RSI drops back below 30 then RSI rises slightly but remains below 30 (remains below oversold) and finally RSI drops lower than its previous low. I forecast that RSI will decrease over the next week and this indicates decrease of price over the next week.
The MACD is a popular trend following momentum indicator that can help identify a security’s momentum, trend direction and duration. is a popular trend momentum indicator that can show us a security's overall trend. The core assumption of this indicator is that a security’s price oscillates around an equilibrium. Therefore by looking at the relationship between different MA calculations, we can identify what specific stage a security maybe of it oscillation cycle. This is why we have two lines, the first is called the MACD (26 - 12 day MA) and the second is called a Signal line (9 day MA). We also have a Histogram (MACD-Signal Line), which is the 1st thing I look at. Finally there is the Zero line, which is basically when the 26 and the 12 day are equal. The MACD , that combines several indicators, is worth watching when one or more of the following happens: crossovers (MACD/Signal/Histogram and Zero line), convergences/divergences between price and rapid changes. During this period the MACD has decreased in confluence with the recent price action. The MACD line remained below the Signal line which was a bearish trend in convergence with the price action. The histogram is trending towards the Zero line which was a bullish trend in divergence with the price action. I forecast that MACD will decrease over the next week and this indicates decrease of price over the next week.
References:
Heikin Ashi concise summary - investopedia.com/trading/heikin-ashi-better-candlestick/
Moving Average concise summary - investopedia.com/terms/m/movingaverage.asp
Support and Resistance summary - investopedia.com/trading/support-and-resistance-basics/
Fake exchange volume summary - blockchaintransparency.org/
RSI concise summary - investopedia.com/terms/r/rsi.asp
MACD concise summary - investopedia.com/terms/m/macd.asp
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