FTM → Fantom Above to Rush Downward Toward $0.29!? Let's Answer.
Fantom has pulled back from its $0.46 high and closing the gap to the 30EMA. Are we about to fall through the EMA ribbons back down in the $0.20-$0.30 range?
How do we trade this? 🤔
Fantom is still in the bull channel, but has a few datapoints working against it. First, there have been three pushes up in the bull channel, a typical number of legs in a trend before the risk of trend change can become greater than the continuation. We also have an RSI at 57.00 and below the Moving Average, a weak indicator on its own, but supports the idea of a pullback or trend change.
The final piece to the puzzle is a retest of the $0.40 area after a fall to the Daily 30EMA. A strong bear candle closing on or near its low should give us enough probability to take a 1:1.5 short playing the reversal.
Until then, we should wait on the sidelines for more price action to confirm!
💡 Trade Ideas 💡
Short Entry: $0.400
🟥 Stop Loss: $0.470
✅ Take Profit: $0.295
⚖️ Risk/Reward Ratio: 1:1.5
🔑 Key Takeaways 🔑
1. Bull Channel, Bias to Long.
2. Three Pushes Up, Potential to Change Trend.
3. Gap from 30EMA and 200EMA Support.
4. RSI at 57.00 and below Moving Average, Bias to Short.
5. Watch for Bitcoin Trend Change at $46,000.
💰 Trading Tip 💰
The RSI is a weak indicator on its own. Coupled with price action analysis, it often complete the picture necessary to make a trade decision.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
How do we trade this? 🤔
Fantom is still in the bull channel, but has a few datapoints working against it. First, there have been three pushes up in the bull channel, a typical number of legs in a trend before the risk of trend change can become greater than the continuation. We also have an RSI at 57.00 and below the Moving Average, a weak indicator on its own, but supports the idea of a pullback or trend change.
The final piece to the puzzle is a retest of the $0.40 area after a fall to the Daily 30EMA. A strong bear candle closing on or near its low should give us enough probability to take a 1:1.5 short playing the reversal.
Until then, we should wait on the sidelines for more price action to confirm!
💡 Trade Ideas 💡
Short Entry: $0.400
🟥 Stop Loss: $0.470
✅ Take Profit: $0.295
⚖️ Risk/Reward Ratio: 1:1.5
🔑 Key Takeaways 🔑
1. Bull Channel, Bias to Long.
2. Three Pushes Up, Potential to Change Trend.
3. Gap from 30EMA and 200EMA Support.
4. RSI at 57.00 and below Moving Average, Bias to Short.
5. Watch for Bitcoin Trend Change at $46,000.
💰 Trading Tip 💰
The RSI is a weak indicator on its own. Coupled with price action analysis, it often complete the picture necessary to make a trade decision.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
Comment:
Zooming into the 4HR chart, FTM printed a pullback at our Resistance Area, as expected. If we're going to long scalp this chart, we need the price to come back down to the support line and give us a strong bounce. This includes a strong bull signal candle closing on or near its high and a follow through with similar characteristics.
As mentioned in the original analysis, keep an eye out for Bitcoins potential fall from $46,000. This could drag the crypto market down and send FTM into reversal mode. Once we receive a proper sell signal and confirmation bar closing below the current support line, it's reasonable to enter a reversal trade short and short back down to the $0.29 area.
Zooming into the 4HR chart, FTM printed a pullback at our Resistance Area, as expected. If we're going to long scalp this chart, we need the price to come back down to the support line and give us a strong bounce. This includes a strong bull signal candle closing on or near its high and a follow through with similar characteristics.
As mentioned in the original analysis, keep an eye out for Bitcoins potential fall from $46,000. This could drag the crypto market down and send FTM into reversal mode. Once we receive a proper sell signal and confirmation bar closing below the current support line, it's reasonable to enter a reversal trade short and short back down to the $0.29 area.
Comment:
FTM the pullback to the Support line after making contact with the major resistance zone in the $0.53-$0.55 area, as included in my previous update! We also received a strong bull bar closing near its high on the 4HR timeframe as shown in the chart above. We have one problem, the close of the bar was below the 30EMA which was then followed by a bear bar and the current bar which is still below.
We need a strong close above the 30EMA resistance to justify a long entry. On the 1HR and 4HR, we're in a bear channel and need a breakout to the upside before making a move. Even if a break happens, I would proceed with a small position and look for a scalp this late in the game. My Bitcoin/Crypto Market analysis still holds that we're in for a major pullback before we see new all-time highs as shown in my recent Bitcoin Lifetime Analysis:
FTM the pullback to the Support line after making contact with the major resistance zone in the $0.53-$0.55 area, as included in my previous update! We also received a strong bull bar closing near its high on the 4HR timeframe as shown in the chart above. We have one problem, the close of the bar was below the 30EMA which was then followed by a bear bar and the current bar which is still below.
We need a strong close above the 30EMA resistance to justify a long entry. On the 1HR and 4HR, we're in a bear channel and need a breakout to the upside before making a move. Even if a break happens, I would proceed with a small position and look for a scalp this late in the game. My Bitcoin/Crypto Market analysis still holds that we're in for a major pullback before we see new all-time highs as shown in my recent Bitcoin Lifetime Analysis:
Comment:
The bull close above the 30EMA was our queue to get in! Adjusted trade is entry at $0.49, take profit at $0.55, and stop loss at $0.43 for a 1:1 Risk/Reward. So far we have a strong bull candle into our trade. If we find signs of weakness at resistance we ought to remove ourselves early or move our stop loss to the support line at $0.44.
The bull close above the 30EMA was our queue to get in! Adjusted trade is entry at $0.49, take profit at $0.55, and stop loss at $0.43 for a 1:1 Risk/Reward. So far we have a strong bull candle into our trade. If we find signs of weakness at resistance we ought to remove ourselves early or move our stop loss to the support line at $0.44.
Comment:
Suggesting tightening up the position per the attached chart. Increase the probability of profit by bringing the take profit to the bottom of the Resistance Zone, tighten up the Stop Loss to just below the Support Line, reduce position size to reduce risk.
Suggesting tightening up the position per the attached chart. Increase the probability of profit by bringing the take profit to the bottom of the Resistance Zone, tighten up the Stop Loss to just below the Support Line, reduce position size to reduce risk.
Comment:
Pull out at $0.505 at a 3% profit. Bitcoin is dangerously close to its previous high of $44,800 and FTM isn't responding well. Taking the profits now and focusing on my IMX short trade and USD/JPY long trade!
Comment:
FTM fell from the targeted Resistance Zone and fell below the support line, giving us a clear indication of a trend change into a trading range. Look for a re-test of $0.44 for a sell signal to enter a short trade down to the Daily 200EMA at $0.32. Watch Bitcoins response to its attempt to enter the $45,000 price range. If we get another rejection, it will likely drag the alt coin market down with it.
FTM fell from the targeted Resistance Zone and fell below the support line, giving us a clear indication of a trend change into a trading range. Look for a re-test of $0.44 for a sell signal to enter a short trade down to the Daily 200EMA at $0.32. Watch Bitcoins response to its attempt to enter the $45,000 price range. If we get another rejection, it will likely drag the alt coin market down with it.
Comment:
I found myself typing what basically turned out to be a more detailed FTM analysis update in the comment section below. I think it makes sense to post it here so the context of my analysis is clear.
The question in the comment section was about identifying what "confirmation" actually was in practice. To demonstrate what I'm looking for, I went back to the last time this pattern played out on FTMs chart from earlier in 2023 which closely resembles our current situation:
We have a bull breakout into a bull channel with three pushes up, a fall to the Daily 30EMA followed by a bounce and failure to make a new high, creating a double top reversal pattern. The price then fell below the 30EMA where it failed twice to close above it and closed near their lows, both are absolutely *key* features of confirmation characteristics. That gives us our short setup and justification for entry around $0.45; we can manage our risk a couple of ways:
1. A 1:1 Risk/Reward scalp with a stop loss around $0.58 to $0.59 and a take profit anywhere from $0.29 to $0.30. This requires a smaller position size because your risk is larger (entry is further away from the stop loss)
2. A 1:2 Risk/Reward with your stop loss just above the 30EMA, betting that FTM will continue to fail at breaking it. This allows for a tighter stop loss which means you can use a larger position size and even, a tighter take profit to satisfy the 1:2 Risk/Reward.
There are several other ways you could have played that trade, but those illuminate the two key modes of thought on this timeframe.
Fast forward to today and my current analysis, we're witnessing a very similar situation:
As stated, we're looking for a test of the Daily 30EMA and our confirmation is the same as the early 2023 chart, bear bars failing to break the 30EMA and closing on or near their lows. I used the same 1:2 Risk/Reward trade approach as the dearly 2023 chart, but the 1:1 Risk/Reward option applies as well which you could play down to the same target level as the 2023 FTM chart of $0.28-$0.29. I believe the 200EMA support may stand in the way of the 1:1 trade, so I think that's a lower probability of profit trade if we didn't intervene. The 1:2 trade carries less risk and more reward with a higher position size and once I pass the 1:1 Risk/Reward area at $0.365, I can start watching for bull candles invalidating my position and take my profit early.
We're all watching Bitcoin closely to see if it breaks and forms a higher high, or if it fails and falls to the downside. At this state of the bull run, I'm skeptical that any bullish activity will last long. We'll let the candles close and tell us which way the market wants to go. More to come soon!
The question in the comment section was about identifying what "confirmation" actually was in practice. To demonstrate what I'm looking for, I went back to the last time this pattern played out on FTMs chart from earlier in 2023 which closely resembles our current situation:
We have a bull breakout into a bull channel with three pushes up, a fall to the Daily 30EMA followed by a bounce and failure to make a new high, creating a double top reversal pattern. The price then fell below the 30EMA where it failed twice to close above it and closed near their lows, both are absolutely *key* features of confirmation characteristics. That gives us our short setup and justification for entry around $0.45; we can manage our risk a couple of ways:
1. A 1:1 Risk/Reward scalp with a stop loss around $0.58 to $0.59 and a take profit anywhere from $0.29 to $0.30. This requires a smaller position size because your risk is larger (entry is further away from the stop loss)
2. A 1:2 Risk/Reward with your stop loss just above the 30EMA, betting that FTM will continue to fail at breaking it. This allows for a tighter stop loss which means you can use a larger position size and even, a tighter take profit to satisfy the 1:2 Risk/Reward.
There are several other ways you could have played that trade, but those illuminate the two key modes of thought on this timeframe.
Fast forward to today and my current analysis, we're witnessing a very similar situation:
As stated, we're looking for a test of the Daily 30EMA and our confirmation is the same as the early 2023 chart, bear bars failing to break the 30EMA and closing on or near their lows. I used the same 1:2 Risk/Reward trade approach as the dearly 2023 chart, but the 1:1 Risk/Reward option applies as well which you could play down to the same target level as the 2023 FTM chart of $0.28-$0.29. I believe the 200EMA support may stand in the way of the 1:1 trade, so I think that's a lower probability of profit trade if we didn't intervene. The 1:2 trade carries less risk and more reward with a higher position size and once I pass the 1:1 Risk/Reward area at $0.365, I can start watching for bull candles invalidating my position and take my profit early.
We're all watching Bitcoin closely to see if it breaks and forms a higher high, or if it fails and falls to the downside. At this state of the bull run, I'm skeptical that any bullish activity will last long. We'll let the candles close and tell us which way the market wants to go. More to come soon!
-Joe Dean
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Related Ideas
Zooming out to the Weekly, we're approaching the next major resistance around $0.53 and beyond that, $0.655. With the three pushes up, high RSI, and Bitcoins measured move coming close, keep an eye out for the trend change to either a trading range and/or flat out reversal in the next week or two. Long scalps only on lower timeframes until then!