BTC Bulls could be running out of steam.
I've been wary of a pending dump, in part because, we've seen the market makers stir things up when the order books get thin, and also because Trend Precognition, VWAP, and dwindling support in the orderbook are indicating that the market could be in store for a pullback.
Overbought
BTC has been overbought on the 4 Hour Chart and we have a double top around $9200 (technically $9189 on Binance) which was just rejected. The RSI on the 4 Hours chart is indicating a pullback from overbought territory.
Trend Precognition
Trend Precognition A2+ Algorithm has become one of my most trusted indicators. Set to a probability of 65%, I find it very reliable on 1 hour charts. Trend Precognition is currently showing a SHORT signal which indicates that we are in a Micro down trend. That doesn't suggest that the overall sentiment isn't still bullish, it just indicates a pullback from the price at the time the indicator appears. Because the Micro trend can pull back, then recover before showing another LONG and it could even paint another SHORT at the next hour's candle close, which is why it's good to use additional conditions to validate ideas. That must be why the trading gods created VWAP.
Volume Weighted Average Price (VWAP)
VWAP may be one of the simplest indicators on the planet. Unlike a lagging Moving Average, the VWAP indicates whether the current price momentum is bullish (above VWAP) or bearish (below VWAP). Even though BTC bulls have been holding their ground above $9000, the fact that current price is trading below VWAP lends support to the Trend Precognition SHORT signal for the Micro trend.
Cup & Handle
A double top at $9198 completed a classic Cup pattern and the rejection began what Trend Precognition and VWAP indicate could play out as the handle to that pattern. The looming question is how far will it drop.
Orderbook Volume (OBV)
How far will price drop? There are certainly multiple levels of support between here and the tentative bottom at $7100 but there is not as much as one might hope.
According to the order book on Binance, the 3 nearest levels of support are at $8890, $8679 and $8548, but that support seems a bit thin. A bit of spoofing seems to be happening on GDAX but still showing "some" support at $8750 and $8000 but the big buy walls that were around $8600 and $7650 for the past couple of days are no longer there.
Bulls have been fighting to hold 9k since last night. That momentum seems to be exhausting and we all have seen what typically happens after that occurs, so be mindful of Alts chasing BTC down. Of course past performance is not indicative of future results, so always be looking for more signs of new support and trend reversals. I'll be using Trend Precognition, VWAP and OBV to help me mitigate risk and optimize my next trading opportunity.
*I am not a financial advisor. Nothing here should be deemed as financial advice. I trade crypto and securities. Trading is risky and you should never risk more than you can afford to lose, because you could lose it all. #MaterialIndicators #TrendPrecognition #VWAP #OBV #BTC #TechnicalAnalysis
I've been wary of a pending dump, in part because, we've seen the market makers stir things up when the order books get thin, and also because Trend Precognition, VWAP, and dwindling support in the orderbook are indicating that the market could be in store for a pullback.
Overbought
BTC has been overbought on the 4 Hour Chart and we have a double top around $9200 (technically $9189 on Binance) which was just rejected. The RSI on the 4 Hours chart is indicating a pullback from overbought territory.
Trend Precognition
Trend Precognition A2+ Algorithm has become one of my most trusted indicators. Set to a probability of 65%, I find it very reliable on 1 hour charts. Trend Precognition is currently showing a SHORT signal which indicates that we are in a Micro down trend. That doesn't suggest that the overall sentiment isn't still bullish, it just indicates a pullback from the price at the time the indicator appears. Because the Micro trend can pull back, then recover before showing another LONG and it could even paint another SHORT at the next hour's candle close, which is why it's good to use additional conditions to validate ideas. That must be why the trading gods created VWAP.
Volume Weighted Average Price (VWAP)
VWAP may be one of the simplest indicators on the planet. Unlike a lagging Moving Average, the VWAP indicates whether the current price momentum is bullish (above VWAP) or bearish (below VWAP). Even though BTC bulls have been holding their ground above $9000, the fact that current price is trading below VWAP lends support to the Trend Precognition SHORT signal for the Micro trend.
Cup & Handle
A double top at $9198 completed a classic Cup pattern and the rejection began what Trend Precognition and VWAP indicate could play out as the handle to that pattern. The looming question is how far will it drop.
Orderbook Volume (OBV)
How far will price drop? There are certainly multiple levels of support between here and the tentative bottom at $7100 but there is not as much as one might hope.
According to the order book on Binance, the 3 nearest levels of support are at $8890, $8679 and $8548, but that support seems a bit thin. A bit of spoofing seems to be happening on GDAX but still showing "some" support at $8750 and $8000 but the big buy walls that were around $8600 and $7650 for the past couple of days are no longer there.
Bulls have been fighting to hold 9k since last night. That momentum seems to be exhausting and we all have seen what typically happens after that occurs, so be mindful of Alts chasing BTC down. Of course past performance is not indicative of future results, so always be looking for more signs of new support and trend reversals. I'll be using Trend Precognition, VWAP and OBV to help me mitigate risk and optimize my next trading opportunity.
*I am not a financial advisor. Nothing here should be deemed as financial advice. I trade crypto and securities. Trading is risky and you should never risk more than you can afford to lose, because you could lose it all. #MaterialIndicators #TrendPrecognition #VWAP #OBV #BTC #TechnicalAnalysis
Comment:
We did see a price drop as expected, and so far only the first level of support was breeched before price bounced and soundly took out the resistance at $9200. Now we must revisit the chart and the indicators to see what's next. A crazy amount of movement occurred to bust through $9200 and it took a whole lot of market selling what was prior long standing support. "Long Standing" is a relative term, let's say, at least a couple of days. In anycase now that those concentrations of support are no longer on the orderbook, it looks a little thin all the way to $8000 and even there, the support (at this time) appears moderate at best. Conversely, resistance above is stacked heavy around $9500 + $10000 + $10500 and every $500 increment above that. Bulls need to reload the orderbook or the sell walls above are going to send price cascading down the handle of the cup.
I am not a financial advisor. #NotAdvice #DYOR