On March 29 I posted an idea analyzing the two week period of March 29-April 12 (link below). This is an update on the forecast and emerging signals. I will post another update in a couple of days and another when the new week starts.
Summary:
Next 1-3 days (April 1-4) ADA/USD likely continuing sideways in narrow channel around 1.20 +/- 0.05
Break below 1.20 channel and POSSIBLE attractive buying opportunity forming in April 5-10 timeframe
April 1-4 As previously forecast, ADA has remained in a very narrow channel around the 1.20 level. Even a BTC flash crash on 3/31 could not bring ADA lower than 1.15 before returning to 1.20.
The new 1D and 3D (3 days remain) charts indicate continued sideways movement with a slight bias to the downside. No apparent buying opportunities in this period.
April 5-10 Indicators in today's new 2D chart and new 5D chart suggest the 1.20 channel starting to break in the April 4-6 timeframe. In the current 2D chart, all indicators are around level 50, as would be expected in sideways price action, but two indicators are at crossover point. The red RSI has descended to just 51, while the blue LSMA has dropped below 50 to 47. If the current 2D candle closes at these levels and this trend continues in the next candle, ADA will be at risk breaking to the downside from the current channel. Notably, with the LSMA descending below 50, the Bollinger bands will expand, allowing any downward momentum to push prices lower than the channel.
Today's new 5D chart shows continued descent of LSMA and RSI, indicating fading upward momentum. The white EMA continues to be well below 50 and has slightly descended further, indicating continuing downward pressure. Finally, the green EMA has accelerated its descent towards level 50. It starts this new candle at 58. The previous candle was at 70, a drop of 12 points. The green EMA only needs to drop another 8 points to cross below level 50. Closing the candle below 50 indicates a probably move to the yellow basis line, 0.78 in the current candle, and likely around 0.87 in the next candle.
Without a reversal, towards the end of this 5D candle (April 5) or in the following 5D candle (April 6-10) odds are rapidly increasing that ADA will see a drop to the range of 1.03 to 0.89 (both levels are fibs). Again, the candle needs to close with green EMA under 50 for this to be probable, so this signal is not strong yet. We must watch the indicators closely in the next several days to see if the trend continues and the signal becomes strong.
If such a drop occurs, it could be an excellent buying opportunity. It looks unlikely that ADA will drop much lower than these levels before the second wave of the altcoin season starts in mid to late April.
In the meantime, be careful with ADA/USD margin longs. Good luck and good fortune!
Comment
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A brief update on ADA/USD risk of a correction to 1.03 or even to 0.80 (around the 50 day MA) level in the April 5-11 timeframe.
As forecast, in the past two days ADA prices have moved sideways in a very narrow channel around 1.20, aside from a small dip to 1.17 and a brief spike to 1.25 when BTC touched 60k. The power of the 1.20 level continues to compel ADA's price action for now, though even yesterday's spike to 1.25 could not overcome prices falling back down below 1.20. The new 2D chart suggests that sideways action will continue for another 2 days, with a bias towards the downside.
In terms of a possible correction, indicators in today's new 2D chart show that the RSI is flat 53 while LSMA has descended further below 50 to 45, and both green and white EMA indicators are just above 50 and descending. This indicates that the risk of a correction has slightly increased in the last candle. The 5D chart (3 days remain) has not significantly deviated from the trend at the start of the candle two days ago. Thus, the risk of a drop continues and the signal is getting stronger.
While waiting for the current 2D and 5D candles to close, we will want to keep an eye on BTC prices. BTC could not break through 60k yesterday, but if it does break above 60k and can turn 60k into a new support level, it could significantly change the trends. Higher BTC prices could raise prices across all coins, eliminating the risk of ADA/USD dropping significantly, or the renewed attention on BTC may increase its dominance at the cost of altcoins, adding downward momentum to ADA's current downward pressure.
Thank you for your analysis. I too am a follower of Wyckoffmode and David Ward. I discovered his indicators last September and have spent as many as 80 hours per week since watching these indicators; how they interact and their relative correlations to each other. I watched 17 hours one particular day and rubbed a blister on my a** (bought a Lazy Boy office chair the next day...hee hee). After all of this observation I am only beginning to make long term TA's, but I am persistent and am confident these indicators work well. For scalping they have already proven effective for me. One thing I need to know is what do the pressure dots/caution dots signify. It seems they have different indications for the mid/near term than they do for the short/scalping groups of time frames. Can you explain? Also, David has been absent for weeks. I know he was attempting to complete his new platform, but I would have thought he would have commed with his followers by now. I am wondering if he has been the victim of something bad like illness or accident.
Thanks again for your TA's. They are MUCH appreciated!
c3l3x
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@CASTECHONE, You're welcome. I'm glad my TA ideas are useful. I don't only use David Ward's Wycoff indicators, but I find them to be a powerful tool in my tool chest. It's an interesting combination of moving averages plus RSI. Some I still find a bit confusing as to why it works well. For example, his Bad Ass Bollinger bands are not you're typical B-Bands. It has taken some time to get used to it. I expect bands to represent standard deviations from the mean, but his use that for the first band and then go to Fibonacci numbers as the number of SD's from the mean. Like you, I'm still figuring out more. David still has a more nuanced understanding of these indicators. Some times I miss "races," for instance. I will often use other indicators including MACD, stochastics, pattern analysis, etc. to see if there is agreement on a signal or know when a signal is strong enough to act on.
Regarding the pressure dots, I generally don't use them unless I'm scalping. In the videos I've watched, David hasn't made clear how the pressure dots work in higher timeframes. In scalping timeframes, I find them useful in knowing when exhaustion is nearing and a reversal might be imminent. This is helpful because indicators like LSMA lag quite a bit. If you find out how they work, please let me know.
David did say that he would be away during March. He seems to have some big plans on his new platform. I hope that there's nothing serious going on. I suspect that he's just deep into his projects and finally making progress now that he has no distractions.
Good luck and good fortune!
Jiri1234
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Do you know what is happening that price is goin up now? It usually goes down at this time?
c3l3x
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@Jiri1234, This movement does not seem unusual. There's a bit of a pattern about prices being down when a new trading day starts, but there are plenty of exceptions, even in the past two weeks (March 17, April 1, etc.). I haven't looked back over the course of months, but I would be surprised to see a highly regular pattern like that over time. Out of curiosity, I'll take a look. As for today, there's a bit of a market rally going on with ETH hitting a new ETH and the potential for BTC to break 60k. However, the price appears to be staying within the channel.
Thanks again for your TA's. They are MUCH appreciated!