Bitcoin Price and Volume Trend is Still Down

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
At this point the Bitcoin price has made a decent recovery from past couple of days where price dropped to the mid-$550's. However, looking at the chart the Bitcoin price and volume trends from June are still down. While the price in relation to the Keltner Channels and moving averages did not behave as I thought, I believe they will still exert influence on the price.

For example, the price could go to the top, or perhaps even above the Keltner Channels - 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 On Balance Volume (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 bearish , and neither price nor volume have broken through overhead resistance. So, for now, I will sit tight and wait to see what happens.


Great chart! I forgot to add it to the "related ideas" in my new chart where I forecast a larger downtrend:

+2 Reply
To be clear, you are correct in thinking the chart has some bearish elements to it, but I think this trend has bottomed and is mostly in response to bearish news.
BitcoinGuru MoonTrader
some traders use candle analysis and other cubbersome methods on Bitcoin. I had a discussion with 2 pro traders and in their opinion for Bitcoin they keep it simple since its an amateur market filled with noob or average people traders who use their emotions to trade. just saying sometimes its better to keep it simple buy low and sell high.
TerryKinder BitcoinGuru
There's the rub. What is low and high? Technical analysis helps a trader decide that. Some of the people I have spoken with who have presented themselves as professional Bitcoin traders don't pick very good points to buy at.

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.
+2 Reply
MoonTrader BitcoinGuru
That's my strategy. I keep it way simple.
MarvinMartian BitcoinGuru
Q. One of my favorite jokes... what's the difference between ignorance and indifference?
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.
MarvinMartian MarvinMartian
Hmmm, no post-edits, I see I must not reply on a phone anymore, without triple-checking spelling, etc.
TerryKinder MarvinMartian
I see what you are saying. The flip side of that is that there are some pretty complicated charts and patterns out there that are either read incorrectly or misinterpreted because the person who created the chart let their biases cloud their judgment.

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.
TerryKinder MoonTrader
My analysis is based on many things including the weekly technical indicators - pretty much all the main ones I look like are bearish. Have also looked at this using all sorts of triangles, Andrews' Pitchfork, Keltner Channels, price support and resistance, Point and Figure charts. At this point, none of them convince me is the time to buy. Based on Point and Figure the next buy point is $680. There are also valid downward targets at $360 and two more below that. Ideally, I would like to both a price target hit and technical indicators to reverse. However, if the technicals turn bullish and the chart pattern is right I would consider going long also.
+1 Reply
BitcoinGuru TerryKinder
for sure I understand that you want to play it safe :) happy trading!
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