BTC Analysis 6/1/2020
Hey team just wanted to do a quick write up on BTC...
We just saw a good breakout from our triangle, with decent volume on the 4H chart. We were expecting this as these kinds of formations will more often than not break to the upside. This is a type of continuation pattern. Usually after a big rally, we will see some consolidation from people taking profits, as well as looking to enter a position (long if trend is up, short if trend is down). There are also the kinds of traders who will wait for the breakout, and retest the previous resistance as support (in this case, the top of the triangle). If support holds, that would be an ideal time to enter a trade with a decent Risk to Reward ratio (Also known as R).
My trade was already long from my Trend Catcher signal at 9700, which coincidentally was the breakout point of this formation.
Now the flip side...
We were already trading right around the .618 fib (9976) for a while and getting rejected multiple times, we managed to crack it. However, we did not manage to crack the previous high at 10550. Until we can break this level, I am hesitant to feel really bullish. Price pumped right into the heart of the "golden pocket" (on my chart the fib zone between 0.65 and 0.705) and got rejected. However, the volume of that breakout has me at least a bit optimistic that we may be able to crack the yearly high and continue on to 11k and beyond.
Another thing to note is, on the 1D time frame, we have average volume and a lower high on RSI. It is typically not a good sign to see a higher closing price but lower RSI. However, I think it would be a bit early to call it a true divergence, as it hasn't re-entered the Overbought area with a lower high. For divergences, I typically want to see it get into either Overbought or Oversold area at least twice, preferably 3 times, with a strong divergence each time. In this case, on both the 4H and 1D time frames, this has yet to occur. If/when it does, I will be keeping a sharp eye out for a drop. An RSI divergence, in the "golden pocket", on weak volume, is a great opportunity to enter a short position or hedge a long position.
I was happy to see this breakout today, and if price can hold above the triangle (and preferably above 9976), I certainly think we can make another attempt at the yearly high.
On a non-TA related note, I would like to point out a recent discovery that a major investment firm, the Grayscale Bitcoin Trust, has been buying up an insane amount of BTC since the halving (approximately 18,000BTC and counting). This was a suspicion I may have mentioned in a previous analysis, good to finally find out who it was. So take that info however you will, but seems to me anyone buying that much BTC would have thought it through a little...
Take care guys and hit that like button if you found this post helpful :)
We just saw a good breakout from our triangle, with decent volume on the 4H chart. We were expecting this as these kinds of formations will more often than not break to the upside. This is a type of continuation pattern. Usually after a big rally, we will see some consolidation from people taking profits, as well as looking to enter a position (long if trend is up, short if trend is down). There are also the kinds of traders who will wait for the breakout, and retest the previous resistance as support (in this case, the top of the triangle). If support holds, that would be an ideal time to enter a trade with a decent Risk to Reward ratio (Also known as R).
My trade was already long from my Trend Catcher signal at 9700, which coincidentally was the breakout point of this formation.
Now the flip side...
We were already trading right around the .618 fib (9976) for a while and getting rejected multiple times, we managed to crack it. However, we did not manage to crack the previous high at 10550. Until we can break this level, I am hesitant to feel really bullish. Price pumped right into the heart of the "golden pocket" (on my chart the fib zone between 0.65 and 0.705) and got rejected. However, the volume of that breakout has me at least a bit optimistic that we may be able to crack the yearly high and continue on to 11k and beyond.
Another thing to note is, on the 1D time frame, we have average volume and a lower high on RSI. It is typically not a good sign to see a higher closing price but lower RSI. However, I think it would be a bit early to call it a true divergence, as it hasn't re-entered the Overbought area with a lower high. For divergences, I typically want to see it get into either Overbought or Oversold area at least twice, preferably 3 times, with a strong divergence each time. In this case, on both the 4H and 1D time frames, this has yet to occur. If/when it does, I will be keeping a sharp eye out for a drop. An RSI divergence, in the "golden pocket", on weak volume, is a great opportunity to enter a short position or hedge a long position.
I was happy to see this breakout today, and if price can hold above the triangle (and preferably above 9976), I certainly think we can make another attempt at the yearly high.
On a non-TA related note, I would like to point out a recent discovery that a major investment firm, the Grayscale Bitcoin Trust, has been buying up an insane amount of BTC since the halving (approximately 18,000BTC and counting). This was a suspicion I may have mentioned in a previous analysis, good to finally find out who it was. So take that info however you will, but seems to me anyone buying that much BTC would have thought it through a little...
Take care guys and hit that like button if you found this post helpful :)
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