BITCOIN - Breakout Trade & Rejection Trade Criteria!!
Updated
After the drop below the consolidation area at 25. March the price has shown incredible strength. It didn't fall any lower than the first momentum, just a little consolidation and after that a classical Bart move.
Let's jump quickly into the current action, to be said, the price approaching one of the strongest bullish confirmation areas which is around the current levels. From the 'dump' into the 'gold' area but this is the crypto situation: You have to be open-minded all the time and react after the market reaction.
This price level is really tricky because of the bullish confirmation and a bearish rejection area difference is only $20-$30.
Let's start from the breakout trade opportunity (bullish breakout) and it will be triggered after we get a candle close inside the green area, then we have:
1. Break above the orange trendline which has been a major down-trendline since 5. May 2018.
2. Break above the short-term counter trendline, pulled from last higher high (HH)
3. Then we are back above the mid-term major counter trendline (blue trendline)
4. Break above the round number $4,000 which has been recently a pretty good resistance level
5. If the daily candle gets also a close inside the green area then the price is above the 100EMA (EMA 8 & 21 have on the Daily chart a golden cross to support that momentum, also they have a golden cross on the 4H timeframe)
6. Short-term higher highs and higher lows are still valid and pretty clean after the dump at 24. February
7. And the last point is the overall strength after it managed to climb upwards from the pretty nice bear setup
Those all get confirmed after the 4H (or a Daily candle) gets a close inside the green area, let's say we need a candle close above $4,040!
Bearish scenario, reversal trade opportunity
This scenario is a bit riskier and more unclear but anyways, after the downwards breakout from the major counter trendline (blue line), the price stopped and it found a support from the 200EMA on the 4H chart which surprisingly held us and we got a bounce upwards.
Sometimes, the market is like a human, if it breaths in (as it was the downwards push on 25. March) it has to breath out also (as it does it now). Multiple great breakout trades consist: we have to have a breakout and the price usually the price makes a little pullback/throwback to retest the breakout area and it continues to the breakout direction, and so as now, we have a breakout below the counter trendline and no the price makes a retest but to get a good trade opportunity we need a bearish candlestick pattern which will confirm that rejection from current level and the perfect scenario would look like this:
Image because then You don't have to scroll upwards to look at which was the colored line ;)
Currently the price retest exactly those all resistance levels, short-term counter trendline (black line from HH), the round number $4,000, mid-term counter trendline (blue line) and it has to get a rejections from them and this rejection has to end with a bearish candlestick pattern (Engulfing, Shooting Star, Evening Star etc.) AND this rejection has to end BELOW the mid-term counter trendline (blue line) and obviously below the $4,000. Only this scenario will trigger the reversal trade opportunity!
Do not forget to support my idea post by hitting the "LIKE" button!
Thank You!
Have a nice day,
Cheers!
*This information is not a recommendation to buy or sell, it is used for educational purposes only!
Let's jump quickly into the current action, to be said, the price approaching one of the strongest bullish confirmation areas which is around the current levels. From the 'dump' into the 'gold' area but this is the crypto situation: You have to be open-minded all the time and react after the market reaction.
This price level is really tricky because of the bullish confirmation and a bearish rejection area difference is only $20-$30.
Let's start from the breakout trade opportunity (bullish breakout) and it will be triggered after we get a candle close inside the green area, then we have:
1. Break above the orange trendline which has been a major down-trendline since 5. May 2018.
2. Break above the short-term counter trendline, pulled from last higher high (HH)
3. Then we are back above the mid-term major counter trendline (blue trendline)
4. Break above the round number $4,000 which has been recently a pretty good resistance level
5. If the daily candle gets also a close inside the green area then the price is above the 100EMA (EMA 8 & 21 have on the Daily chart a golden cross to support that momentum, also they have a golden cross on the 4H timeframe)
6. Short-term higher highs and higher lows are still valid and pretty clean after the dump at 24. February
7. And the last point is the overall strength after it managed to climb upwards from the pretty nice bear setup
Those all get confirmed after the 4H (or a Daily candle) gets a close inside the green area, let's say we need a candle close above $4,040!
Bearish scenario, reversal trade opportunity
This scenario is a bit riskier and more unclear but anyways, after the downwards breakout from the major counter trendline (blue line), the price stopped and it found a support from the 200EMA on the 4H chart which surprisingly held us and we got a bounce upwards.
Sometimes, the market is like a human, if it breaths in (as it was the downwards push on 25. March) it has to breath out also (as it does it now). Multiple great breakout trades consist: we have to have a breakout and the price usually the price makes a little pullback/throwback to retest the breakout area and it continues to the breakout direction, and so as now, we have a breakout below the counter trendline and no the price makes a retest but to get a good trade opportunity we need a bearish candlestick pattern which will confirm that rejection from current level and the perfect scenario would look like this:
Image because then You don't have to scroll upwards to look at which was the colored line ;)
Currently the price retest exactly those all resistance levels, short-term counter trendline (black line from HH), the round number $4,000, mid-term counter trendline (blue line) and it has to get a rejections from them and this rejection has to end with a bearish candlestick pattern (Engulfing, Shooting Star, Evening Star etc.) AND this rejection has to end BELOW the mid-term counter trendline (blue line) and obviously below the $4,000. Only this scenario will trigger the reversal trade opportunity!
Do not forget to support my idea post by hitting the "LIKE" button!
Thank You!
Have a nice day,
Cheers!
*This information is not a recommendation to buy or sell, it is used for educational purposes only!
Note
We were really close to getting a fully confirmed breakout (candle gets a close JUST below the short-term counter trendline), it was a very close but still pretty powerful statement from bulls!Thank you!
Note
It is a Daily chart and if the Daily candle gets a close as it is right now then we have still another confirmation and this is a bullish candlestick pattern Morning Star.Morning Star can drive us easily into the next day's bullish momentums but as said, to be more secure then the short-term counter trendline (black line from HH) has to break also!
Thank you!
Note
Guidelines for a bearish scenario, after current 4H candle close.At the moment there is a one candlestick pattern which can form after the next 4h candle close and it is a Railroad track:
If the current 4H candle gets a close inside the red area then it would be confirmed bearish candlestick pattern and the down pressure is higher than the buying pressure.
Now, you have pretty precise instructions for both scenarios!
Thank You!
Note
A bit educational, a bit full of hope - anyways the new idea post:
Cheers!
Note
We have a close inside the green area:
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