• The 50D EMA is a dynamic S/R level. Meaning that if tested from above, it provides support, and if tested from below it acts as resistance.
• During this uptrend, since December 2022, every time Bitcoin broke below the 50D EMA, the
result was a price decrease of 8% - 12%.
• A combination of an EMA (dynamic support) and diagonal support below the EMA act as a
cushion. Meaning that price depreciation and the time spent below the EMA is less.
Practical application:
1. S/R Trade:
a) Long a touch of the trendline from above with the expectation of a 7% - 10% bounce.
SL is a daily close below the 50D EMA.
b) Short a test of the 50D EMA from below with the expectation of a 7% - 8% drop
(conservative target). Remember that diagonal support below the EMA cushions the fall in
price.
2. Trading Reversals:
You can subtract 7% - 8% from the 50D EMA and look for additional confluence to find a
likely reversal Point in a downtrend.
For Example:
If I subtract 7% from the current level of 50D EMA we get the 0.618 fib retracement at
27,281 USDT.
In this area I have the following additional confluences:
• 26,530 Horizontal Support.
• Diagonal Trendline.
• Demand Zone.
This leads me to an area of a high confluence for reversal. Enough for me to suggest a trade:
Entry: 27,300
SL: 26,300
Target: 33,00
R: R: 1:5
As we progress toward this goal, I will refine the entry and SL.
Don’t enter a trade blindly, wait for a reversal sign such as a bullish divergence and/or a swing failure pattern.
What do you think? Please share in the comments.
Best Wishes.
• During this uptrend, since December 2022, every time Bitcoin broke below the 50D EMA, the
result was a price decrease of 8% - 12%.
• A combination of an EMA (dynamic support) and diagonal support below the EMA act as a
cushion. Meaning that price depreciation and the time spent below the EMA is less.
Practical application:
1. S/R Trade:
a) Long a touch of the trendline from above with the expectation of a 7% - 10% bounce.
SL is a daily close below the 50D EMA.
b) Short a test of the 50D EMA from below with the expectation of a 7% - 8% drop
(conservative target). Remember that diagonal support below the EMA cushions the fall in
price.
2. Trading Reversals:
You can subtract 7% - 8% from the 50D EMA and look for additional confluence to find a
likely reversal Point in a downtrend.
For Example:
If I subtract 7% from the current level of 50D EMA we get the 0.618 fib retracement at
27,281 USDT.
In this area I have the following additional confluences:
• 26,530 Horizontal Support.
• Diagonal Trendline.
• Demand Zone.
This leads me to an area of a high confluence for reversal. Enough for me to suggest a trade:
Entry: 27,300
SL: 26,300
Target: 33,00
R: R: 1:5
As we progress toward this goal, I will refine the entry and SL.
Don’t enter a trade blindly, wait for a reversal sign such as a bullish divergence and/or a swing failure pattern.
What do you think? Please share in the comments.
Best Wishes.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.