Bitcoin: You only have to listen.
I know the pain of losing a grip of cash through inexperience at trading and emotional regulation. We are at one of those moments were lots of money are going to be made and lost and you need to listen. I am not qualified to give financial advice, and I am not a Certified Market Technician. But I have worked a lot to master the basics and it comes down to a few basic principles. This isn't advise
Lets simplify this chart, which can be somewhat noisy. First the Resistance
The fuschia lines outline a symmetrical triangle and the price action is at its 4th major test of this level. Past action suggesting future action is a rejection.
The rising green trend line is a massively important multi-year trend line. It is painfully obvious to me know how important it is, and if I knew in 2018 what I knew now I probably wouldn't be wage-slaving today. This green line was support from 2016 to the latter end of 2019. Now in 2020 it is asserting itself as resistance. Just so happens that the green and fuschia arrows form a crux.
The volume profile Value area can act as resistance and support and price action has a tendency to go from one value area to the other, and to be drawn into the midline, or the price level where the most price action (buying and selling) has occurred. I like to place the visible range of the chart at trend reversals/trend beginnings to get an idea where the volume is on that specific trend. The volume upper value area has clearly been acting as resistance since June 2019 and I don't forecast that changing in any meaningful way.
Now we have covered resistance again, onto indicators
The Volume Profile suggest places that price action will cut right through (at the low volume nodes) and stall or bounce (high volume nodes). If price action goes "edge to edge" on the value area we are out of the triangle, and the bottom fuschia trendline is now in play to act as resistance. If we proceed to the Point of Control this suggest that the price action is in descending triangle, and that will be pretty brutal.
The On Balance Volume with EMAs works really well when you use some divergences and basic charting. The fuschia trendline continues to show classic breaish divergence and I beleive that will create a downtrend.
Conclusion
Based on this system, which I have attempted to craft by mastering the basics, there is very limited chance for an upside move for swing traders and investors in bitcoin. There is an extraordinary case for price action being at resistance and facing a retrace. Lots of signs suggest sub 3,900. This isn't the time to get reckless. I follow several youtubers, and most of them are missing these fundamentals. They can mention the gaussian channel all they want, or some other fancy indicator, but the basics can get you a long way.
In generally I consider Bitcoin to be a liquidity sponge, and I generally think that bitcoin will go up greatly against the dollar under these QE eternal conditions, but when things get scary people in brokerages flee to cash, and people on mainstreet flee to cash and precious metals. When the brokerage selling is done crypto and precious metals will have their day. But that day isn't going to happen this year. Triangles often break down into falling wedges and I see either of the triangles detailed in this post doing the same
- Price Action. This includes all the basic charting formations. It also includes when support and resistance flip, either at sloped trend lines or horizontal levels. It also includes all the retests that can be so frustrating when you are seeking continuation or reversal. Previous price action suggest future price action. The idea of fib extensions, fib retracements, bollinger bands, ichimoku clouds, average true range, all play into this concept of using previous price action to predict future price action.
- Volume Action. Volume is the most important indicator, bar none. It confirmed break outs, areas of support, and chart patterns. You can use volume by time, which is standard, or volume profile.
- Indicators/Oscillators signals. Particularity in this case, Indicator Divergence. This is last for a reason. As by brother told me after I got blown the f/o on a trade "the indicators were divergent before they weren't."
Lets simplify this chart, which can be somewhat noisy. First the Resistance
The fuschia lines outline a symmetrical triangle and the price action is at its 4th major test of this level. Past action suggesting future action is a rejection.
The rising green trend line is a massively important multi-year trend line. It is painfully obvious to me know how important it is, and if I knew in 2018 what I knew now I probably wouldn't be wage-slaving today. This green line was support from 2016 to the latter end of 2019. Now in 2020 it is asserting itself as resistance. Just so happens that the green and fuschia arrows form a crux.
The volume profile Value area can act as resistance and support and price action has a tendency to go from one value area to the other, and to be drawn into the midline, or the price level where the most price action (buying and selling) has occurred. I like to place the visible range of the chart at trend reversals/trend beginnings to get an idea where the volume is on that specific trend. The volume upper value area has clearly been acting as resistance since June 2019 and I don't forecast that changing in any meaningful way.
Now we have covered resistance again, onto indicators
The Volume Profile suggest places that price action will cut right through (at the low volume nodes) and stall or bounce (high volume nodes). If price action goes "edge to edge" on the value area we are out of the triangle, and the bottom fuschia trendline is now in play to act as resistance. If we proceed to the Point of Control this suggest that the price action is in descending triangle, and that will be pretty brutal.
The On Balance Volume with EMAs works really well when you use some divergences and basic charting. The fuschia trendline continues to show classic breaish divergence and I beleive that will create a downtrend.
Conclusion
Based on this system, which I have attempted to craft by mastering the basics, there is very limited chance for an upside move for swing traders and investors in bitcoin. There is an extraordinary case for price action being at resistance and facing a retrace. Lots of signs suggest sub 3,900. This isn't the time to get reckless. I follow several youtubers, and most of them are missing these fundamentals. They can mention the gaussian channel all they want, or some other fancy indicator, but the basics can get you a long way.
In generally I consider Bitcoin to be a liquidity sponge, and I generally think that bitcoin will go up greatly against the dollar under these QE eternal conditions, but when things get scary people in brokerages flee to cash, and people on mainstreet flee to cash and precious metals. When the brokerage selling is done crypto and precious metals will have their day. But that day isn't going to happen this year. Triangles often break down into falling wedges and I see either of the triangles detailed in this post doing the same
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