For example, the price could go to the top, or perhaps even above the - somewhere just North of $620. But, then, around the $630 level it runs into price resistance represented by the green line. A similar picture is painted by (OBV) which correlates with price uptrends and downtrends. OBV had a nice little uptick, but it is not that far from the resistance represented by the red line.
Not pictured on this chart is the KDJ indicator. Earlier today when the price advanced past $600 the "J" part of the indicator moved above the 100 level. "J" can move above 100 and below 0. This can lead to dramatically higher or lower prices, but it also is a good indication right now of the price becoming overstretched.
There is significant price resistance from $620 all the way up to $680. Weekly technical indicators are , and neither price nor have broken through overhead resistance. So, for now, I will sit tight and wait to see what happens.
Sure, if someone bought when bitcoin was a few dollars and you made a ton of money, then they may not be worried about entry and exit points. For anyone else either not wanting to lose money, not wanting to tie up their money for long periods of time waiting for the price to go up because they picked the wrong entry point, and those who want to maximize profits, technical analysis can help.
Technical analysis, combined with discipline, will also help reign in emotions which many new, and experienced traders, are subject to.
A. I don't know, and I don't care.
I find nothing cumbersome about charts. In fact, watching charts as much as I have, I have written a trading bot for ALL cryptocurrency, based on techenicals that have merit. It's for sale for a reasonable price, that you can make back in a week, using it.
And I offer this chart, Bitcoin: A story of Perspective https://www.tradingview.com/e/Ii4IKTaI/ as a statement to, if you invest at all, simple is a fool's errand.
As a rule, I prefer the most simple, elegant, and explanatory chart or indicator over the more complex one.
That doesn't mean that technical analysis is, or should be, simple. It is difficult. It requires thinking outside of the box and not running with the herd. It requires taming emotions and cultivating patience. None of these things are simple. They often run against human nature, but they can be learned.
One very simple indicator that can tell a person a lot about where the Bitcoin price is heading is On Balance Volume (OBV). Price follows volume. OBV has tended to oscillate up and down. It is currently oscillating lower. Price isn't going to go up significantly until the pattern breaks back to the upside.
Another simple indicator to look at is KDJ. It has been oscillating as well. The last five complete cycles - High -Low - High have taken 7, 6, 5, 8, and 10 weeks. So, the overall cycle is lengthening.
However, the amount of time the cycle has taken to go from High to Low is lengthening:
2, 2, 1, 6, 8
...while the Low to High cycle is getting shorter:
5, 4, 4, 2, 2
It is not a complicated thing to observe. It isn't necessarily predictive, but it does give a person a sense of what the cycles High to Low and Low to High will look like. For me at least, it means when prices approach a low, you can't wait too long to buy because the up cycle is relatively short.
Simple is also not the same as easy. There are a lot of things or rules that are simple (not complex or difficult to understand), but difficult to follow. For example, eating right and exercising are simple rules that can improve health. It isn't easy necessarily to make them part of your life. Basic trading rules - having entry and exit points, etc. are also simple concepts, but not always easy to implement and utilize on a daily basis. Patience is a simple concept but can be maddeningly difficult to exercise which is exactly where technical analysis and rules can help.
Until we see some decent On Balance Volume, don't think we will see any dramatic or even not-so-dramatic move up in price. Tend to think a boring Bitcoin market will actually push the Bitcoin price down over the next several weeks. Also, looking at both OBV and the KDJ indicator, it looks like a move down could last longer than many think.
Of course, all it takes is for the indicators to reverse for things to change. All the weekly indicators I have been watching are either down or turning down also, so don't see the impetus for price to move higher yet. Price will eventually bottom and turn back up, but I prefer to watch the indicators and let them tell the story.
A little more about OBV here:
To me it is a good action-reaction and cyclic type indicator. You're not going to get any price information out of it, but it ought to help with direction and momentum. If OBV drops steeply price mirrors it.
Of course, it's a bit of a chicken and egg dilemma - which comes first? However, you can avoid that by using it somewhat as a trigger line which is how I'm using it right now. As long as OBV stays below the black horizontal line I'm not expecting price to move significantly higher.
OBV is useful to look at the price-volume trend. It has been in a downtrend (with just a little bounce lately, but has not moved above the horizontal line). Price has trended down as well.
I will use OBV in conjunction with other indicators, chart patterns, etc. to determine when to go long Bitcoin again.