BTC Market Structure Changing - What to watch for
https://www.tradingview.com/x/WniQrhtr/
Understanding price action and market structure is one of the most valuable concepts in terms of keeping your head straight in this market. Bitcoin recently printing a couple signs of changing market structure and I wanted to share because sometimes this stuff is almost too simple that people overlook it.
The chart above is showing that after the enormous BTC drop in November, we started to print some higher highs and higher lows. In other terms, the 4hr chart was showing a bullish uptrend. This uptrend is shown by the orange line on the chart. All of this is great and wonderful, but this is where things start to change.
About a week ago, BTC price action pushed through this uptrend and closed a strong bearish candle. This was our first sign that something in the structure/trend is changing. This is an important thing, so I'll repeat it; The price action breaking through the orange trend line DOES NOT mean the market is reversing but it's a great warning sign that it's time to pay attention and be cautious with trades. This price action continued to drop far enough that we have already printed a lower low, which is also marked on the chart. And yet again, this does not mean that the market is reversed and going down, but that it's time to pay close attention to the price action coming up.
So the question is what's next? That is impossible to predict perfectly, but I'd like to share what is incredibly possible using similar market structure and ideas:
https://www.tradingview.com/x/bG20jpJi/
If the market structure is actually changing like the warning signs have been saying, then it's fair to expect a lower high to be printed as the market moves in waves. The question is simply where to expect a lower high. It can occur anywhere, but what I have marked on the chart is what I would consider to be a highly likely area for a lower high. This would be retesting a level of strong resistance for BTC. This also overlaps nicely with the Fibonacci golden pocket retracement that BTC loves to follow. That's really all there is to it, just support and a couple Fibonacci levels. This may change as more data comes in the next couple weeks but this is on my radar right now.
Happy trading! And keep an eye out for a lower high in the near future!
Slight word of caution: Volume will likely be very low in the coming 2 weeks due to holidays so don't get caught up too much in the noisy data and price action that occurs between now and the new year
Understanding price action and market structure is one of the most valuable concepts in terms of keeping your head straight in this market. Bitcoin recently printing a couple signs of changing market structure and I wanted to share because sometimes this stuff is almost too simple that people overlook it.
The chart above is showing that after the enormous BTC drop in November, we started to print some higher highs and higher lows. In other terms, the 4hr chart was showing a bullish uptrend. This uptrend is shown by the orange line on the chart. All of this is great and wonderful, but this is where things start to change.
About a week ago, BTC price action pushed through this uptrend and closed a strong bearish candle. This was our first sign that something in the structure/trend is changing. This is an important thing, so I'll repeat it; The price action breaking through the orange trend line DOES NOT mean the market is reversing but it's a great warning sign that it's time to pay attention and be cautious with trades. This price action continued to drop far enough that we have already printed a lower low, which is also marked on the chart. And yet again, this does not mean that the market is reversed and going down, but that it's time to pay close attention to the price action coming up.
So the question is what's next? That is impossible to predict perfectly, but I'd like to share what is incredibly possible using similar market structure and ideas:
https://www.tradingview.com/x/bG20jpJi/
If the market structure is actually changing like the warning signs have been saying, then it's fair to expect a lower high to be printed as the market moves in waves. The question is simply where to expect a lower high. It can occur anywhere, but what I have marked on the chart is what I would consider to be a highly likely area for a lower high. This would be retesting a level of strong resistance for BTC. This also overlaps nicely with the Fibonacci golden pocket retracement that BTC loves to follow. That's really all there is to it, just support and a couple Fibonacci levels. This may change as more data comes in the next couple weeks but this is on my radar right now.
Happy trading! And keep an eye out for a lower high in the near future!
Slight word of caution: Volume will likely be very low in the coming 2 weeks due to holidays so don't get caught up too much in the noisy data and price action that occurs between now and the new year
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