Deconstructing Charts: BTCUSD
Обновлено
Hi all,
As BTCUSD continues to consolidate inside a triangle pattern on the smaller timeframes, we saw today a pretty significant bearish candle form on the daily and 12 hour timeframes, all this while ETHUSD continued its bull rally with a phenomenal day.
1. Price Action: Our last 12 hour candle for BTCUSD brought the price action below the 20 moving average and price was unable to continue its previous small rally, failing to make a higher high. . The bulls continue to hold the trendline (bottom blue line of channel) but if they don't get their act together soon, it may not last for very long.
2. Head and Shoulders: Looking at this 12-hour chart, we are starting to see signs that price is breaking down on the head and shoulders pattern. However, this does not mean the head and shoulders pattern can be confirmed. The neckline of this head and shoulders is coinciding with the trendline previously mentioned. It is important to note that If BTCUSD were to confirms this head and shoulders by piercing and closing below its neckline (purple dotted line), it would also be piercing our very important support trendline, which could indicate a reversal and new downward trend given the bears control.
3. Moving Averages: For moving average, I typically like to use 20 MA (purple) along with the 50 (yellow), 100 (orange) and 200 (red) EMA . As you can see, price is now below our 20 MA (purple) which is now acting as yet another point of resistance for BTCUSD.
4. Volume: Today we saw volume increase a bit more but it was mostly controlled by the bears.
5. RSI and MACD: When the all-time high was create back in Jan. 8th, it did so by making a very clear bearish divergence in the RSI , which was quickly followed by a selloff causing RSI to fall and test the 50-level area, we have since bounced twice from the 50-level mark but are trading barely just above this level. For those not familiar with RSI , many traders consider the 50-level area to be the midpoint between Bullish and Bearish conditions. RSI above 50 indicates buying while RSI below 50 indicates selling. Shifting our attention quickly to MACD , there is a clear death cross that occurred after hitting our all-time high and we have been trending down ever since.
6. ADX and DI: After forming the peak of our right shoulder, we saw DI- cross up on DI+ (red crossing up on green line) with ADX (black line) falling below 20 level, this could be indicating our uptrend coming to an end or we could see some sideways action until a new trend is established.
Although today was a bearish kind of day for BTCUSD, we are still trading above support and can technically still rally upwards. I still believe the best course of action now, is to remain vigilant and be patient. Have your trade plan ready and always remember to set stop losses to help minimize your risk. Take a pause and analyze any positions you may already have or any new positions you may want to take. Patience, preparedness, and awareness is what is important right now.
P.S please remember these are just ideas and not trading advise.
As BTCUSD continues to consolidate inside a triangle pattern on the smaller timeframes, we saw today a pretty significant bearish candle form on the daily and 12 hour timeframes, all this while ETHUSD continued its bull rally with a phenomenal day.
1. Price Action: Our last 12 hour candle for BTCUSD brought the price action below the 20 moving average and price was unable to continue its previous small rally, failing to make a higher high. . The bulls continue to hold the trendline (bottom blue line of channel) but if they don't get their act together soon, it may not last for very long.
2. Head and Shoulders: Looking at this 12-hour chart, we are starting to see signs that price is breaking down on the head and shoulders pattern. However, this does not mean the head and shoulders pattern can be confirmed. The neckline of this head and shoulders is coinciding with the trendline previously mentioned. It is important to note that If BTCUSD were to confirms this head and shoulders by piercing and closing below its neckline (purple dotted line), it would also be piercing our very important support trendline, which could indicate a reversal and new downward trend given the bears control.
3. Moving Averages: For moving average, I typically like to use 20 MA (purple) along with the 50 (yellow), 100 (orange) and 200 (red) EMA . As you can see, price is now below our 20 MA (purple) which is now acting as yet another point of resistance for BTCUSD.
4. Volume: Today we saw volume increase a bit more but it was mostly controlled by the bears.
5. RSI and MACD: When the all-time high was create back in Jan. 8th, it did so by making a very clear bearish divergence in the RSI , which was quickly followed by a selloff causing RSI to fall and test the 50-level area, we have since bounced twice from the 50-level mark but are trading barely just above this level. For those not familiar with RSI , many traders consider the 50-level area to be the midpoint between Bullish and Bearish conditions. RSI above 50 indicates buying while RSI below 50 indicates selling. Shifting our attention quickly to MACD , there is a clear death cross that occurred after hitting our all-time high and we have been trending down ever since.
6. ADX and DI: After forming the peak of our right shoulder, we saw DI- cross up on DI+ (red crossing up on green line) with ADX (black line) falling below 20 level, this could be indicating our uptrend coming to an end or we could see some sideways action until a new trend is established.
Although today was a bearish kind of day for BTCUSD, we are still trading above support and can technically still rally upwards. I still believe the best course of action now, is to remain vigilant and be patient. Have your trade plan ready and always remember to set stop losses to help minimize your risk. Take a pause and analyze any positions you may already have or any new positions you may want to take. Patience, preparedness, and awareness is what is important right now.
P.S please remember these are just ideas and not trading advise.
Заметка
As I was posting this video I BTCUSD started to drop and test the trendline again. Let see if we can bounce from here again.
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