jacobcanfield

My Secret Chart For When To To Buy Bitcoin In A Bullish Trend

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Hello traders!

I hope the markets have been treating you well and you've been crushing all of your trades.



In today's post, I want to give away a chart that has made me a lot of money dating back to 2016.

I also want to go in to detail on how I use the RSI to determine when to get in and out of Bitcoin by determining bearish and bullish control as well as the transition zones.

The key to understanding this chart is that it is truly about waiting for the proper set-ups and not rushing in and over trading.

For this chart, we are looking at the weekly price action.

Not the 3 day, daily, 4 hour, hourly or... god for bid, the 1 minute chart.

This is like a birds eye view of the market where we pick our spots to enter in to positions where our thesis is quickly invalidated.

First, let me explain the RSI . RSI stands for relative strength index and it is a momentum oscillator that is calculated with average price closings and given a ratio from 0 to 100.

Think of 50 as the pivot zone for bullish and bearish control of the market.

In Bitcoin's case, above 54 = Bullish and Below 44 = Bearish .

There are, of course, nuances to this general rule, but by and large, this has dictated Bitcoin price action since 2011.

Here is a zoomed in view of RSI that I had posted about a week ago to my private trading members.


This is also located at the bottom of the chart with much more detail.

This is a powerful tool because you can clearly see the bull market support levels as well as the transition zones before bitcoin shifts trends from bullish to bearish and vice versa.

Now, the other key is the 21 exponential moving average .

Since 2011, this has been the **KEY** support and resistance in both bull markets and bear markets.

Since we've started our rally in 2019, we have not tested this support level .

This, to me, is the ultimate place for building a long term swing position for Bitcoin's bullish uptrend.

The current 21 EMA is sitting at the $8900-$9100 level.


We are also getting closer and closer to our 53 RSI bullish bounce zone that we have seen react heavily off of.

Our invalidation level is very clear here as we can cut our trade and exit if our RSI level doesn't hold and a weekly closes below the 21EMA.

By waiting and building a position here, we are drastically reducing our risk because we are buying a correction in an uptrend, rather than buying IN the uptrend itself.

Now, one thing people will probably start talking about is the potential MACD flip on the weekly.


We are getting close, but it hasn't happened yet and to be honest, you can go back and look at MACD correlation and the results aren't really that great. I put more faith into RSI and moving averages than MACD myself.

On my next post, I'll show you how to determine tops and potential sell points for Bitcoin in a bullish market.

If you enjoyed my post, leave a comment below with your own thoughts and give a like on the chart.

Your support is amazing and thanks for reading!
Comment: First off, you guys are awesome. Thank you for the support.

Second, I want to go a bit more in depth on this strategy.

I am a macrobull on Bitcoin and my spot bitcoin was bought much lower. ($3400-$4000 region with more added on in the $6,000 zone.


Here was my chart where I had talked about the 200 week moving average as a potential bottom of the market.

So, for me, I do not move in and out of USDT or fiat. I am a margin trader, so I look for bearish divergences and weekly resistances from 2017 and I take out short positions to hedge my USD against rejections of high time frame resistance.

When price was at $13,000, I bought futures contracts as well and have taken profit and will look to add more LONG futures contracts whenever we get closer to the 21 EMA on the weekly and my RSI bounce zone.

This is not a 'all in' and 'all out' strategy for USDT trading.

Also, remember... this is a ZOOMED OUT strategy. You are not focusing on the small price movements form day to day, but instead waiting for the high time frame set-ups to come together. This means that you may only get 4-5 trades in 6 months, but the high probability of the trade working out makes it one to make sure you watch.

A simple approach can be to set alerts on the weekly 55 RSI + Weekly 19 EMA so as you get an early warning that you are approaching the potential buy zone.

It is also important to note that it is possible that we don't hit the 21 EMA on this correction. We may break out and rally upwards only for the 21 EMA to continue higher, making our bounce zone also go higher.

Remember, as a trader, we are not trying to be fortune tellers. We use data and backtesting strategies to quantify the probability of something happening in the past for happening again in the future.

The key is finding a greater than 50/50 statistical edge and applying it to the markets.

I hope that gives a little more insight than my original post!

Again, thanks for all the support. You guys are awesome and I hope to continue sharing my work with you guys.
Comment: Here is a new analysis that I cover more of the short term trading environment near the weekly close.

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Thank you Jacob, this has been a gr8 help looking at the overall market. Would your "secret Chart" for BTC apply to LTC as well?
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This is amazing and thank you for sharing.

What do you mean by spot bitcoin? Is that bitcoin you are holding long and that you don't touch for trading? Implying that you have separate funds for the margin trading?
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This is one of the greatest TA i've seen this month, thanks a lot!
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Thanks for the excellent analysis. It looks like we're getting close to your buy point.

Could you tell me what your strategies are taking profits?

Alex
+1 Reply
Simple and powerful, that is the magic of this TA.
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shorter termin

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Changed your mind now huh? HAH.

GET REKT NOOOOOOOOB!
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@vicsp, Have you hit the "play" button on the chart?
It shows BTC is still hovering over the weekly 21EMA,,, perhaps it will bounce. ?
The chart is just sayin: IF it does bounce, THEN it is often (statistically) a good time to get in. That's all
So there is no way to really get reck on this analysis.
let's see what happens... and then trade it
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@earthling, Lol. There are like 3-4 people that just want to see everyone get rekt that posts. This usually means they are projecting after they themselves have been rekt.
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Great analysis! Thank you.
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