Bitcoin Analysis... What I am watching and what I am trading on.
Overview
BTCUSD
Weekly Bitstamp (main chart above)
Shown above on the main chart, we have the a converging Tenkan-sen (Conversion Line in orange) and Kijun-sen (Base Line in pink). If the weekly closes in 3 and a half days below the 50 Period Moving Average we will see the Tenkan/Kijun Cross cross, in reaction to the TK cross it will put a very bearish outlook on Bitcoin. We need to see a solid rally pushing the general strength of the market forward and out of this danger zone.
The last time we saw a bearish TK cross on the weekly was in May of 2014, it led to a sell off from $650 to our bottom of $152. However this is a new market with new conditions from that time frame, so the psychology of the price action is completely different, if this crosses as it appears to be doing I will be longing every pharmaceutical company that sells antidepressants and riding a nice leveraged short to protect my portfolio in crypto.
Our support on the daily can be seen in green there, it is a broad range depending on what exchange you are looking at. For this idea it will be my go to exchange Bitstamp. It has provided me solid data for years now. (As a note I do chart Bitfinex also and I use GDAX as a tie breaker.)
Daily Bitstamp
The current Daily candle as of this writing closes in 5 hours, if we close in this formation we a have a Bullish candle formation. I am not saying this is the bottom whatsoever so please read carefully, I am simply saying we can see a bit of Bullish price action.
The formation shown above in orange is a Bullish Spinning Top among a few other complex candle structures, for now we will focus on that. Spinning tops indicate indecisiveness in the market with the current trend. Considering the market is finding small support at this level even under heavy sell pressure, a close in this formation could bump us up to $8,100 to the Kijun-sen (Base Line in pink). Now there is a proper way to trade a Spinning Top, many traders see this and automatically trade it without any kind of proper strategy or confirmation. The correct way is to watch for volume spikes in the direction of the reversal either prior to the close or directly after it. We are seeing a slight bump in buy pressure on the Chaikin Money flow on the daily.
Let's take a look at smaller time frames to confirm.....
12 Hour Bitstamp
On the top 12 Hour chart we have our support showing. Honestly there is not much holding this current level up besides the general market attempting to call the bottom, I don't trade the general market though. On the bottom 12 Hour chart we can see a slight increase in buy pressure from the Chaikin Money Flow from the heavy sell pressure we have just experienced furthering the argument for a Bullish Spinning Top as mentioned above on the Daily . The Stochastic, Relative Strength Index and On Balance Volume all show collusion with no real divergences apparent.
We will see some resistance from the prior support level broken at $7,900. That being said rallying to the Daily Kijun-sen at $8,100 will be tough unless we see a dramatic reversal in buy pressure on the Chaikin Money Flow.
6 Hour Bitstamp
C.M.F. shows decreasing sell pressure. Now what is important here is the Stoch and RSI. My friend VinnyVo44 pointed out here that whenever we reach these levels with the RSI we typically see at least a $300 uptick.
See here > https://twitter.com/VinnyVo44/status/999403121536389121 Same goes for the Stochastic.
BTCUSD
Weekly Bitstamp (main chart above)
Shown above on the main chart, we have the a converging Tenkan-sen (Conversion Line in orange) and Kijun-sen (Base Line in pink). If the weekly closes in 3 and a half days below the 50 Period Moving Average we will see the Tenkan/Kijun Cross cross, in reaction to the TK cross it will put a very bearish outlook on Bitcoin. We need to see a solid rally pushing the general strength of the market forward and out of this danger zone.
The last time we saw a bearish TK cross on the weekly was in May of 2014, it led to a sell off from $650 to our bottom of $152. However this is a new market with new conditions from that time frame, so the psychology of the price action is completely different, if this crosses as it appears to be doing I will be longing every pharmaceutical company that sells antidepressants and riding a nice leveraged short to protect my portfolio in crypto.
Our support on the daily can be seen in green there, it is a broad range depending on what exchange you are looking at. For this idea it will be my go to exchange Bitstamp. It has provided me solid data for years now. (As a note I do chart Bitfinex also and I use GDAX as a tie breaker.)
Daily Bitstamp
The current Daily candle as of this writing closes in 5 hours, if we close in this formation we a have a Bullish candle formation. I am not saying this is the bottom whatsoever so please read carefully, I am simply saying we can see a bit of Bullish price action.
The formation shown above in orange is a Bullish Spinning Top among a few other complex candle structures, for now we will focus on that. Spinning tops indicate indecisiveness in the market with the current trend. Considering the market is finding small support at this level even under heavy sell pressure, a close in this formation could bump us up to $8,100 to the Kijun-sen (Base Line in pink). Now there is a proper way to trade a Spinning Top, many traders see this and automatically trade it without any kind of proper strategy or confirmation. The correct way is to watch for volume spikes in the direction of the reversal either prior to the close or directly after it. We are seeing a slight bump in buy pressure on the Chaikin Money flow on the daily.
Let's take a look at smaller time frames to confirm.....
12 Hour Bitstamp
On the top 12 Hour chart we have our support showing. Honestly there is not much holding this current level up besides the general market attempting to call the bottom, I don't trade the general market though. On the bottom 12 Hour chart we can see a slight increase in buy pressure from the Chaikin Money Flow from the heavy sell pressure we have just experienced furthering the argument for a Bullish Spinning Top as mentioned above on the Daily . The Stochastic, Relative Strength Index and On Balance Volume all show collusion with no real divergences apparent.
We will see some resistance from the prior support level broken at $7,900. That being said rallying to the Daily Kijun-sen at $8,100 will be tough unless we see a dramatic reversal in buy pressure on the Chaikin Money Flow.
6 Hour Bitstamp
C.M.F. shows decreasing sell pressure. Now what is important here is the Stoch and RSI. My friend VinnyVo44 pointed out here that whenever we reach these levels with the RSI we typically see at least a $300 uptick.
See here > https://twitter.com/VinnyVo44/status/999403121536389121 Same goes for the Stochastic.
Comment:
Please see the analysis yesterday for another detailed look.
Click the below image.
Click the below image.
Trade active:
Comment:
As mentioned above on the 15 minute chart we reversed trend based on the Tom Demark sequential. We ended up with a perfect setup on the way down too for another scalp trade long.
We still show declining pressure on the C.M.F so I still expect a drop out of local support unless the C.M.F. corrects to match the price movement. We currently sit at the Tenkan-sen (Conversion Line in orange).
We still show declining pressure on the C.M.F so I still expect a drop out of local support unless the C.M.F. corrects to match the price movement. We currently sit at the Tenkan-sen (Conversion Line in orange).
Comment:
Additional analysis can be found here by clicking the image.
Comment:
Latest Analysis can be found here by clicking the image below
Comment:
Additional analysis and trend overview can be found by clicking the image below.
All posts are for educational purposes and are simply my views of markets conditions.
Please do your own research and use my content to educate yourself.
Please do your own research and use my content to educate yourself.
Jumping to a lower time frame we see a nice increase on the C.M.F that gave us an early indicator of the sell off reversal. This is why I pay so much attention the Volume, check my past publications for tutorials.
As we approach this local resistance in the red dotted line I will need to see a strong buy pressure presence otherwise we will reject and continue our free fall down.
1 Hour Bitstamp
Hourly here shows a few interesting things, the RSI and the MACD show a slight divergence but nothing too dramatic for this time frame, I'll simply be noting it and keeping an eye on it. What is something to watch is the 8 on the Tom Demark Sequential script. Typically if we play a 1-9 we see a definite trend reversal on higher time frames.
We rallied up from $7,290 to then rest on the Tenkan-sen (Conversion Line in orange) at $7,500 which is acting as light support.
15 Minute Bitstamp
We are at a decision point as of writing on the 15 minute, the STOCH is slightly divergent from the current rally. We show declining buy pressure on the C.M.F with rising price action, the only way this doesn't drop from here is if we have solid buy pressure pulling it out of the divergence. The Tom Demark sequential just printed a 9 indicating a trend reversal.
Conclusion
Market buy pressure is waning on lower time frames, I will be playing a drop out of current price action on the 15 minute, one thing to keep in mind is keep an eye on the close of the daily for the above mentioned candle formation and temporary rally. Typically larger time frames overrule the lower ones but the lower time frames can give us an early indication of a pull out of the higher time frame trends. Watch these lower time frames to see if we have a bigger sell off and cancel the possible rally seen on higher time frames.
I am marking this idea as neutral not because there is no play here but because we will see a drop from the price action at this level to a potential small rally seen on higher time frames. Overall there is still nothing solid to indicate we are in a Bull rally. Remember never trade against the trend unless its small time frame analysis.
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