This Moving Average Is Bitcoin's Most Important To Watch!
Hi Traders!
It looks like our ascending triangle is still playing out as I had laid out on March 12th.
On a short time frame daily chart, we are seeing a breakout above the diagonal and horizontal resistance that has plagued Bitcoin.
We are still seeing no volume to confirm the move yet though!
We finally got a 10/20 cross on the weekly, which has been very rewarding historically, but I want to caution you a bit here as we are at a strong supply zone.
We are right at the top of resistance now and this would be the best place to start hedging with a low leverage short or a futures contract, which I'll go into a little bit on this post.
One of my favorite things to trade since I started trading Bitcoin back in 2016 was the 20 day moving average on the weekly. This moving average has been incredibly reliable for me through and through.
Historically, we see a bit of 'vortexing' with the 10/20 MA's before a decision is made. This is usually the accumulation zone before the bull market runs.
Here is 2011 - 2012. You can see that we had two cross overs on the weekly before we moved upwards again.
Here is another chart in 2014-2015. Notice the vortexing back and forth around the 10/20MA's while it holds the 200MA. This was another area of accumulation.
The one thing to watch for on these 10/20 MA cross overs is we want to see volume confirm the move. Back in 2015-2016, we saw a lot of vortexing, but it wasn't until November '15 that we got the volume push.
Then in October '16, we got the big volume push that kicked off the bull market. This is usually a sign of the 'smart money' accumulation.
Once we do get a confirmed breakout above the 20MA with strong volume, the 20MA then turns into a KEY support. Just check out how the 20MA weekly supported the price during the bull run of 2016-2018.
These are great 'buy zones' once an established trend change has occurred (for me that's when the 200MA is broken on the daily to the upside with a strong closing with volume.) - Until then.. (we're just in an intermediate pull back of a bear trend.)
Now, that doesn't mean we can't make money on these bounces, because you can, but you ALWAYS have to keep in mind the context of the market that you're trading.
Now, once the 20MA is broken to the downside with volume, then it usually acts as strong resistance on the weekly chart.
So, for this most recent cross, we really need to see some volume! (Crank it to 11 man!)
We are currently at strong supply/resistance that has held back Bitcoin several times. We also have a 9 sell candle on both the 3day TD Sequential and the weekly TD Sequential.
3DAY TD9
WEEKLY TD9
We are also seeing a very tight bollinger band, which usually means we are about to get some serious volatility in the market.
On the daily Bollinger Band, we also have resistance as well as the pinch occurring.
Short and long interest is still pretty low with longs still outweighing shorts, but not by much. It looks like people are still waiting on the sidelines before they start to take up margin positions. Especially with all of the 'darth maul' candles that are liquidating high leverage short and longs. Unlike other $1,000+ green candles in the past, those were usually a biproduct of short squeezes that fueled the fire. In this case, we don't have the ammunition to push us like we did before.
As I said, we are just breaking out of resistance, but in a strong supply zone, so this is probably the best place to hedge, with a low leverage short if you bought spot down loser in the $3400-$3500 range just in case we get a strong pull back.
If we do break down from here, it will most likely be a violent reaction. I'm watching the $4,000 level as an important support to hold us up.
Thanks for reading and if you want to support my work, give me a like and leave a comment below. I try and respond to them all!
It looks like our ascending triangle is still playing out as I had laid out on March 12th.
On a short time frame daily chart, we are seeing a breakout above the diagonal and horizontal resistance that has plagued Bitcoin.
We are still seeing no volume to confirm the move yet though!
We finally got a 10/20 cross on the weekly, which has been very rewarding historically, but I want to caution you a bit here as we are at a strong supply zone.
We are right at the top of resistance now and this would be the best place to start hedging with a low leverage short or a futures contract, which I'll go into a little bit on this post.
One of my favorite things to trade since I started trading Bitcoin back in 2016 was the 20 day moving average on the weekly. This moving average has been incredibly reliable for me through and through.
Historically, we see a bit of 'vortexing' with the 10/20 MA's before a decision is made. This is usually the accumulation zone before the bull market runs.
Here is 2011 - 2012. You can see that we had two cross overs on the weekly before we moved upwards again.
Here is another chart in 2014-2015. Notice the vortexing back and forth around the 10/20MA's while it holds the 200MA. This was another area of accumulation.
The one thing to watch for on these 10/20 MA cross overs is we want to see volume confirm the move. Back in 2015-2016, we saw a lot of vortexing, but it wasn't until November '15 that we got the volume push.
Then in October '16, we got the big volume push that kicked off the bull market. This is usually a sign of the 'smart money' accumulation.
Once we do get a confirmed breakout above the 20MA with strong volume, the 20MA then turns into a KEY support. Just check out how the 20MA weekly supported the price during the bull run of 2016-2018.
These are great 'buy zones' once an established trend change has occurred (for me that's when the 200MA is broken on the daily to the upside with a strong closing with volume.) - Until then.. (we're just in an intermediate pull back of a bear trend.)
Now, that doesn't mean we can't make money on these bounces, because you can, but you ALWAYS have to keep in mind the context of the market that you're trading.
Now, once the 20MA is broken to the downside with volume, then it usually acts as strong resistance on the weekly chart.
So, for this most recent cross, we really need to see some volume! (Crank it to 11 man!)
We are currently at strong supply/resistance that has held back Bitcoin several times. We also have a 9 sell candle on both the 3day TD Sequential and the weekly TD Sequential.
3DAY TD9
WEEKLY TD9
We are also seeing a very tight bollinger band, which usually means we are about to get some serious volatility in the market.
On the daily Bollinger Band, we also have resistance as well as the pinch occurring.
Short and long interest is still pretty low with longs still outweighing shorts, but not by much. It looks like people are still waiting on the sidelines before they start to take up margin positions. Especially with all of the 'darth maul' candles that are liquidating high leverage short and longs. Unlike other $1,000+ green candles in the past, those were usually a biproduct of short squeezes that fueled the fire. In this case, we don't have the ammunition to push us like we did before.
As I said, we are just breaking out of resistance, but in a strong supply zone, so this is probably the best place to hedge, with a low leverage short if you bought spot down loser in the $3400-$3500 range just in case we get a strong pull back.
If we do break down from here, it will most likely be a violent reaction. I'm watching the $4,000 level as an important support to hold us up.
Thanks for reading and if you want to support my work, give me a like and leave a comment below. I try and respond to them all!
Related Ideas
Possible fractal is showing a continuation if we can hold the 200MA.
Click here to check it out!