LONG BTC: incoming bullish pattern ? It seems so...On the 4h chart, in the last 24h the price kept ranging from $31,100.67 to $32,020.00, with a decrease of 0.43%. The relatively low volatility of the last days indicate we are currently in an accumulation period.
In the last 24h the price kept hitting the lower band of the Keltner channel , but not the upper, as the EMA acted as a resistance, therefore when the price does finally reach the upper band it could be a signal that the downtrend is near an end. Bitmex index shows negative funding rates since May 2021, this suggesting also an incoming reversal bullish pattern as, typically, negative funding means shorts pay long and this leads to bullish price movements.
After long period of negative rates the price always had a movement to the upside, however, the index cannot predict when this will happen, therefore for having an approximate picture of indicate potential areas of importance related to time, I use Fibonacci time zones indicator. This acted pretty accurately in predicting historical areas where a swing high, low, or reversal occurred, therefore the 55 vertical line just crossed may indicate the end of the bearish pattern. A third indicator pointing to an incoming price rise is the RSI index, which was close to 30 when the price hit the lower band of the Keltner channel, suggesting the asset was overbought, therefore a price rise can be predicted. It seems that the trend is approaching the end of a descending tringle, with strong support at 31k area, so a breakout is expected. However, even if descending triangles usually indicate bearish patterns, in this case given all the others indicators I expect a breakout to the upside, therefore this could be a good entry point for long position. In order to understand entry price and targets for swing trading I take a look at the daily chart.
On the daily chart we can see now the price finds strong support at 31.900$ level and ranges between the support and the EMA of the Keltner channel which acts as a resistance.
On this time frame, the price hasn’t hit the lower band of the channel yet therefore I expect a continuation pattern to the downside, as indicated by the angle of the channel, up to when the price hits the level of two times the ATR below the EMA. After, I expect a breakout to the upside.
TRADE POSITION: LONG
ENTRY PRICE: $30.140 for a lower risk trade wait for the confirmations:
• MACD crossover (not yet)
• RSI <30 (not yet, at the time of writing on the daily chart is at 38: the asset is almost overbought)
• High Volume in-flows (not yet)
TARGET I: $33.500
TARGET II €36.600
TARGET III: $40.400
STOPLOSS: $ 28.500
