Bitcoin is macro bullish : seeing price action for what it is.
Hello one and all, just wanted to share my view on how the BTC price chart seems to be telling me right now.
A few things at the outset:
1) I strongly believe a top down approach is critical for all traders, even for those trading on the lower time-frames
2) This analysis is just a snapshot in time as of this day : depending on how price action develops, the picture/outlook may change.
3) Trading is all about probabilities - the scenarios presented here are what I believe are the most probable ones drawing from current price action, it does not mean that they will *definitely* play out
Monthly timeframe - log scale : The macro view
Starting from the monthly log chart (the chart shared above - also check snapshot below)
It seems pretty clear that the current price action is corrective, and is coming from an impulsive leg prior to it.
The natural progression from here should be another impulsive leg up.
Now, note that this continuation could happen from here, or price could come down lower for another leg within the corrective structure before breaking up.
If it does break down - key area to look for is the 6k key support area.
Weekly timeframe : provides a clearer structure
Price is tapping the outer structure of the current larger bull flag structure.
Note that the current impulsive bounce came from the .618 fib level of the overall prior impulse.
Also note that price is still above the weekly 50 MA. Why is this important ? Price history - see below
Significance of the weekly 50 MA in Bitcoin price history
Noe that in its entire available price history (using Bitstamp chart here), Bitcoin after breaking impulsively above the 50 MA remains above it for the entire bull run, and never closes below it.
Hence even if BTC breaks lower, a decisive break and close below the 50 MA can be a good indicator of the macro trend reversing.
Daily timeframe : Digging deeper
At this point, these are the two scenarios I see as being most probable
If the first option is to be played (break out of correction in the current impulse, without a deeper correction to 6k levels), the 4H timeframe can be used for entries
4-Hour timeframe : Possible paths from here
You could enter on a corrective move to the blue line (prior resistance turned support), or on bullish impulse out of current consolidation.
If price breaks bearishly below the support, this indicates the current picture has changed.
A few things at the outset:
1) I strongly believe a top down approach is critical for all traders, even for those trading on the lower time-frames
2) This analysis is just a snapshot in time as of this day : depending on how price action develops, the picture/outlook may change.
3) Trading is all about probabilities - the scenarios presented here are what I believe are the most probable ones drawing from current price action, it does not mean that they will *definitely* play out
Monthly timeframe - log scale : The macro view
Starting from the monthly log chart (the chart shared above - also check snapshot below)
It seems pretty clear that the current price action is corrective, and is coming from an impulsive leg prior to it.
The natural progression from here should be another impulsive leg up.
Now, note that this continuation could happen from here, or price could come down lower for another leg within the corrective structure before breaking up.
If it does break down - key area to look for is the 6k key support area.
Weekly timeframe : provides a clearer structure
Price is tapping the outer structure of the current larger bull flag structure.
Note that the current impulsive bounce came from the .618 fib level of the overall prior impulse.
Also note that price is still above the weekly 50 MA. Why is this important ? Price history - see below
Significance of the weekly 50 MA in Bitcoin price history
Noe that in its entire available price history (using Bitstamp chart here), Bitcoin after breaking impulsively above the 50 MA remains above it for the entire bull run, and never closes below it.
Hence even if BTC breaks lower, a decisive break and close below the 50 MA can be a good indicator of the macro trend reversing.
Daily timeframe : Digging deeper
At this point, these are the two scenarios I see as being most probable
If the first option is to be played (break out of correction in the current impulse, without a deeper correction to 6k levels), the 4H timeframe can be used for entries
4-Hour timeframe : Possible paths from here
You could enter on a corrective move to the blue line (prior resistance turned support), or on bullish impulse out of current consolidation.
If price breaks bearishly below the support, this indicates the current picture has changed.
Comment:
The longer term picture is unchanged as of now.
In the long term view, nothing has changed - the bias for BTCUSD is still bullish.
Why? Because the current price action is overall in a descending channel, with mostly corrective price action, following the prior bullish impulsive leg.
Hence it is most likely that the next impulse will be bullish.
Areas of interest to look for longs are outlined in the chart snapshot below.
In the long term view, nothing has changed - the bias for BTCUSD is still bullish.
Why? Because the current price action is overall in a descending channel, with mostly corrective price action, following the prior bullish impulsive leg.
Hence it is most likely that the next impulse will be bullish.
Areas of interest to look for longs are outlined in the chart snapshot below.
Simplifying trading is the way to go.
Clarity on the chart -> clarity in thinking.
Clarity on the chart -> clarity in thinking.
BTC has been moving correctively since the breakout few weeks back. The most probable scenario now is a continuation of the move into another impulse. However, an entry needs to present itself.
A valid long entry would be if the current corrective price structure ("bull flag") breaks impulsively towards the upside.