Hi, I wanted to share this idea I've been following for a little while...currently watching to see if it plays out.
Sorry for the messy chart...I needed to scroll back in time far enough to show the earlier demonstration on the same chart.
I've noticed how on big moves, they seem to play out in several phases, which seem to be mapped nicely by the MFI indicator.
3 Phases:
1 - Bounce Phase
The initial move down drops MFI into the 'Bounce Level' zone from which it recoils and rallies back up.
This defines an initial low, but does not define THE low. It just provides an initial 'bounce'.
2 - Low Level 1
After price rallyies back up and fails, MFI drops again, but this time, bouncing off of the 'Low 1' level.
This defines a lower price low than the previous one despite appearing LESS OVERSOLD than the higher low before.
I like this as it demonstrates how reading Oversold and Overbought levels in BTC imo is totally pointless :-)
3 - Low Level 2
After bouncing off of the 'Low 1' zone the rally fails again and this time finds yet another low, this time at an even less oversold MFI than the previous low.
Looking at the current cycle, we have visited the 'Bounce Level' so far.
I'm seeing a failed rally in price and expecting a visit to the 'Low 1' level for a potentially more defining low than 276.
Measured move suggests a wave up from the 217-220 region.
I see a further potential low around 182/183.
Hope it plays out! :-)
Sorry for the messy chart...I needed to scroll back in time far enough to show the earlier demonstration on the same chart.
I've noticed how on big moves, they seem to play out in several phases, which seem to be mapped nicely by the MFI indicator.
3 Phases:
1 - Bounce Phase
The initial move down drops MFI into the 'Bounce Level' zone from which it recoils and rallies back up.
This defines an initial low, but does not define THE low. It just provides an initial 'bounce'.
2 - Low Level 1
After price rallyies back up and fails, MFI drops again, but this time, bouncing off of the 'Low 1' level.
This defines a lower price low than the previous one despite appearing LESS OVERSOLD than the higher low before.
I like this as it demonstrates how reading Oversold and Overbought levels in BTC imo is totally pointless :-)
3 - Low Level 2
After bouncing off of the 'Low 1' zone the rally fails again and this time finds yet another low, this time at an even less oversold MFI than the previous low.
Looking at the current cycle, we have visited the 'Bounce Level' so far.
I'm seeing a failed rally in price and expecting a visit to the 'Low 1' level for a potentially more defining low than 276.
Measured move suggests a wave up from the 217-220 region.
I see a further potential low around 182/183.
Hope it plays out! :-)